Sunday, May 6, 2018Sha’baan 20, 1439 AH

BUSINESSGULF TIMES

US looks beyond Iran nuke deal

Outlook is seen brighter aft er 1st-quarter drop

NEXT TALKS | Page 2 LNG SHIPPING | Page 17

QP awards ‘detailed design’ deal for North Field expansion off shore jacketsQatar Petroleum has awarded the “detail

design” to “approved for construction” status for the off shore jackets of the new

North Field Expansion Project to McDermott. The “detailed design” of the jackets is an im-

portant step towards awarding the procurement, fabrication and installation (EPCI) contract by the end of this year, which will pave the way to commencing the drilling campaign in 2019.

Qatargas is entrusted with executing this mega project on behalf of QP, and will commence the “detailed engineering” with McDermott for the off shore Jackets in addition to the recently an-nounced onshore Front End Engineering Design (FEED) with Chiyoda.

QP president & CEO Saad Sherida al-Kaabi said, “This is yet another milestone on the road to implementing one of the most ambitious gas projects in the southern sector of the North Field, and starting the fi rst LNG production from the new LNG mega train by the end of 2023, thereby increasing our LNG production capacity from 77mn to 100mn tonnes per annum.”

“With a targeted capacity of 4.6bn cubic feet per day, the North Field expansion project will add about 1mn barrels per day of oil equivalent to the State of Qatar’s production” al-Kaabi added.

QP said, “The award’s scope is part of a larger wide-ranging off shore scope, which consists of six wellhead platforms, jackets and associated intra-fi eld and main trunk lines to shore, to de-liver 4.6bn standard cubic feet a day of gas from Qatar’s North Field, which is the largest non-as-sociated gas fi eld in the world.

“The off shore facilities will be integrated with the three new 7.8mn-tonnes-per-year mega LNG trains, ensuring Qatar’s continued global leadership in liquefi ed natural gas production, which will increase from 77mn tpy to 100mn tpy.”

Qatargas has a well-proven history in deliver-ing such major projects, and in operating vari-ous onshore and off shore facilities in the North Field with a high degree of reliability and op-erational excellence. It also has an established and long-term successful relationship with McDermott.

CONTINUOUS EXPANSION: Page 20

Exports growth pushes Qatar-Italy trade volume to €2.3bn in 2017, says ITA offi cial

Al-Kaabi: Global LNG leadership.

BUSINESS

Gulf Times Sunday, May 6, 20182

US is looking beyond Iran nuclear deal deadline to what comes nextTrump could quit deal but delay reimposing financial sanctions; Iran sees little incentive to agree to new or revamped accord

BloombergWashington

Donald Trump seems set on pulling out of the Iran nuclear deal next week, with US off icials suggesting that any initial diplomatic turbulence will be followed by negotiations for a new accord.There’s one big hang-up: Iran is ruling out new talks, calling the current agreement “non-negotiable.” And America’s European allies continue to back it, saying the deal has been essential to reining in Iran’s nuclear programme.As markets, US allies and the government in Tehran question what might follow a US withdrawal, the Trump administration remains focused on how it could toughen or replace the agreement to address issues such as Iran’s behaviour in the Middle East - including its firm foothold in Syria and support for Hezbollah fighters that threaten Israel - and its continuing development of ballistic missiles.President Trump hinted at his thinking

last Monday. While refusing to reveal what he’ll do by May 12, he repeated his belief the existing accord is “a horrible agreement for the US.” But, he added, “That doesn’t mean I wouldn’t negotiate a new agreement.”Iranian President Hassan Rouhani’s government says the US is “bullying” the Middle East nation. Iran has long claimed Washington isn’t fully complying with its side of the deal - a requirement that world powers ease economic sanctions - and that uncertainty about the agreement’s future has stymied needed investment.“Let me make it absolutely clear once and for all: We will neither outsource our security, nor will we renegotiate or add on to a deal we have already implemented in good faith,” Foreign Minister Mohammad Javad Zarif said in a video message tweeted on his account.Few people are willing to predict how this impasse will be bridged.“We’re not going to have perfect clarity under any circumstances on May 13,” said Suzanne Maloney, deputy director of the foreign policy program at the Brookings Institution.While the May 12 deadline has been portrayed as a yes-or-no decision for Trump, it’s not that simple. Under a

law passed by Congress, Trump has to determine periodically whether to continue waiving sanctions linked to transactions with Iran’s central bank. The 2015 accord required the US to lift those sanctions. If they go back into eff ect, the US will almost certainly be in violation of the agreement.One possible scenario: Trump declares he’s backing out of the deal and reimposes sanctions but leaves time before those sanctions take eff ect. Such a grace period would put new pressure on European allies to make fresh concessions toward fixing what the US considers the deal’s biggest gaps.“I don’t think he’s going to snap back sanctions,” said Amir Handjani, a senior fellow with the Atlantic Council’s South Asia Center. “I think he’s going to give more time to see if the US and Europeans can come up with a formula to present to Iran.”While new Secretary of State Mike Pompeo hasn’t promised a

grace period, he said at his Senate confirmation hearing in April that “even after May 12 there is still much diplomatic work to be done.”Trump’s long-term goal is a better deal, not conflict, said Michael Singh, managing director of the Washington Institute for Near East Policy and a former senior director for Middle East aff airs under President George W Bush.“Even if we were to try to reimpose sanctions and ramp up pressure, ultimately the object of doing so would be to get them to the negotiating table

to agree to more far-reaching steps,” Singh said.For weeks, US negotiators have been meeting with allies France, the UK and Germany in an eff ort to reach a consensus on side agreements responding to US concerns. They say they’ve made progress on some elements but haven’t

crossed the finish line on the “sunset clauses” in the current deal - under which many of the key provisions expire in coming years and Iran is allowed to start enriching uranium to high levels again.Despite Iran’s insistence that it won’t negotiate a new agreement, the

administration is betting that economic strains in the country, and the prospect of further isolation if the deal crumbles, will eventually force its leaders to the negotiating table. That’s viewed with intense scepticism by outsiders. They say Iran has no reason to agree to a tougher deal without concessions like those that led to the accord, formally known as the Joint Comprehensive Plan of Action, in the first place.“They would be seen as very weak to go back into negotiations,” Handjani said. “If the US isn’t honouring its commitment already to the JCPOA, what’s the assurance that they’re going to honour a follow-up to the deal?”While inflation in Iran has slowed in recent months, the rial has slumped and oil climbed as markets await the US decision. The head of the International Monetary Fund’s Middle East and Central Asia operations said on Monday that Tehran will need to accelerate economic reforms, including plans to overhaul its banking system, if the US quits the accord.“When there’s imperfect clarity businesses hesitate and Iran loses,” said Maloney of the Brookings Institution.That gives the Trump administration what it sees as a crucial advantage: Iran is abiding by the nuclear accord while

currently enjoying few of its potential benefits.As for a future deal, US off icials were encouraged by a four-point proposal off ered by French President Emmanuel Macron last week that echoed many of their demands. But Macron has argued that any new agreement be an add-on, not a replacement for the current accord.In a call with Rouhani late last month, Macron and his Iranian counterpart agreed to work together to try to preserve the accord. But Iran’s off icial government website quoted Rouhani as saying Iran won’t accept any additional restrictions and the deal is “by no means negotiable.”At the same time, the European strategy appears to be to try to manage Trump - possibly with some sort of additional measures - while also coaxing Iran to stay in the nuclear deal as long as possible, perhaps until after 2020 when the US may have a new president. “It took 13 years of a nuclear standoff with Iran to get a deal,” said Ali Vaez, Iran project director at the International Crisis Group. “It would be a pity to lose it as a result of something that could at the end of the day be considered a rough patch.”

Iran’s nuclear programmeBy Jonathan TironeVienna

Iran’s nuclear capabilities have been the subject of global hand-wringing for more than two decades. While Iran’s leaders long insisted the country was not building nuclear weapons, its enrichment of uranium created mistrust. After more than two years of negotiations amid threats to bomb the country’s facilities, Iran and world powers agreed in 2015 to settle the dispute. The deal set limits on the Islamic Republic’s nuclear work in exchange for relief from economic sanctions that crimped oil exports and hobbled its economy. However, hostility toward Iran under US President Donald Trump raises the risk that the agreement will fall apart.

The Situation

Trump has called the pact the “worst deal ever” and has repeatedly threatened to upend it one way or another. Under the agreement - which was signed by Iran, the US, China, France, Russia, Germany, the UK and the European Union - Iran maintains the ability to enrich uranium for peaceful purposes. It retains about 5,000 centrifuges capable of separating the uranium-235 isotope from uranium ore. For 15 years, it agreed to refine the metal to no more than 3.7% enrichment; the level needed to fuel nuclear power plants, and pledged to limit its enriched-uranium stockpile to 300 kilograms, 3% of its stores in May 2015. The International Atomic Energy Agency verified that Iran eliminated its stockpile of 20%-enriched uranium, which can be used to make medical

isotopes and to power research reactors but could also be purified to weapons-grade at short notice. Inspectors also confirmed that Iran destroyed a reactor capable of producing plutonium. Subsequent IAEA assessments since the deal took eff ect found Iran sticking to its obligations. US off icials estimated that the pact extended the time it would take Iran to produce enough fissile material for a bomb from a few months to a year. Trump says that, because of its sunset clauses, the deal will “give” ran nuclear weapons. He also objects that Iran’s long-range missile programme was not curtailed by the agreement. Concerned that the US will disrupt the accord, European off icials have held discussions with their American counterparts on how to moderate Iran’s missile programme.

The Background

Iranian statements and international contacts prompted the US Central Intelligence Agency to warn in 1992 that the Gulf country could develop a nuclear weapon. While Iran reaff irmed its commitment to the 1968 nuclear Non-Proliferation Treaty, it wanted the country’s “right” to enrich uranium recognised before it made concessions. Few countries were prepared to do that during the eight-year presidency of Mahmoud Ahmadinejad. The breakthrough came after more moderate President Hassan Rouhani was elected in 2013.

The Argument

Middle East powers including Israel and Saudi Arabia have criticised the agreement, saying it empowers Iran’s regime to the

detriment of regional security. Critics in the US Congress say Iran can’t be trusted to make any fissile material, whether for energy, medicine or bombs. Sceptics aren’t satisfied by IAEA verification. They point out that Iran only acknowledged its two main uranium enrichment plants after they were exposed by people outside the country. Supporters of the

deal say Iran would never agree to abandon enrichment entirely and that a decade’s worth of sanctions failed to stop its nuclear programme. Keeping an enrichment capability was important to Iran, presumably for reasons of national pride. Like other enriching countries such as Argentina, Brazil, Japan and South Africa, the technology gives Iran the

ability to pursue nuclear weapons should it choose to break its commitments. Defending the agreement, Trump’s predecessor, Barack Obama, has said that it prevented another war in the Middle East. Without a deal, supporters say, Iran would have been left free to pursue its nuclear ambitions unchecked by world powers and without the pact’s onerous inspections.

Bloomberg QuickTake

Source: International Atomic Energy Agency

European strategy appears to be to try to manage Trump - possibly with some sort of additional measures - while also coaxing Iran to stay in the nuclear deal as long as possible, perhaps until aft er 2020 when the US may have a new president

US President Donald Trump walks to Marine One as he departs for Cleveland, Ohio, from the South Lawn of the White House in Washington yesterday. Trump seems set on pulling out of the Iran nuclear deal next week, with US off icials suggesting that any initial diplomatic turbulence will be followed by negotiations for a new accord.

BUSINESS3Gulf Times

Sunday, May 6, 2018

BloombergHong Kong

Chinese telecommunications-gear maker ZTE Corp is fac-ing further fallout from a

recent US ban on its purchases of American technology, this time in the loan market.

At issue is the recent suspension of trading in the company’s shares, and a clause in a $450mn loan it took in 2014.

The clause says that China’s sec-ond-biggest network equipment maker would face an event of default if trading in its shares on the Hong Kong and or the Shenzhen Stock Ex-change is suspended for more than 14 straight trading days, or if the listing is terminated.

The company is now asking lend-ers to waive the clause, as the 14-day mark approaches next week, people familiar with the matter said.

Trading of ZTE shares has been suspended in Hong Kong and Shen-zhen since April 17, after the US Commerce Department imposed a seven-year ban on buying Ameri-can-made chips and components, as punishment for allegedly violat-ing a sanctions settlement over the

sale of products to Iran and North Korea. ZTE’s dependence on US technology raises questions about how the company will generate cash fl ow to service and repay debt, after it runs down product inventories, according to S&P Global Ratings.

“If the Chinese government gets involved, if there is any sign of a

state bailout, I think the Americans will use this as proof that the Chi-nese are providing state subsidies, grooming industry champions, and it isn’t a level playing fi eld,” said Christopher Lee, managing director of corporate ratings at S&P in Hong Kong.“It’s a very diffi cult situa-tion for ZTE.” ZTE didn’t immedi-

ately comment when contacted by Bloomberg. Majority consent of the lenders is required and the dead-line for responses on the waiver is June 4, according to the people, who aren’t authorised to speak publicly and asked not to be identifi ed.

The prospect of a default comes just a week after the technology company reported a surge in its fi rst quarter earnings, without address-ing the impact of US sanctions.

The loan due in July was borrowed via ZTE HK Ltd and guaranteed by ZTE Corp. The deal was led by Bank of China Hong Kong, BNP Paribas, Crédit Agricole CIB and Societe Generale. Eight more lenders joined the facility in general syndication stage, Bloomberg data show.

On Wednesday, the Pentagon banned Chinese-made smart-phones from military exchanges. “Huawei and ZTE devices may pose an unacceptable risk to de-partment’s personnel, information and mission,” Pentagon spokesman Major Dave Eastburn said in a state-ment. Huawei Technologies Co last month scrapped a dollar-denomi-nated bond sale and delayed a euro bond off ering amid possible viola-tions of sanctions banning sales to Iran.

China’s ZTE facing loan default threat

Xiaomi shows off scorching growth ahead of $10bn IPOBloombergBeijing

Xiaomi Corp, going for wow-factor

ahead of what could be the largest initial

public off ering since 2014, has revealed

a blistering pace of growth that’ll help

it take on Apple and Samsung in global

smartphones.

The Chinese smartphone maker filed

for an IPO in Hong Kong Thursday, kicking

off a process that’s expected to raise at

least $10bn and confer a value of $100bn

on the eight-year-old company.

That off ered investors a glimpse into

the inner workings of the company

controlled by billionaire Lei Jun, and its

ups-and-downs since almost dropping off

the radar in 2016.

Revenue surged 67.5% to 114.5bn yuan

($18bn) in 2017, after posting anaemic

growth of just 2.4% a year earlier, while

operating profit more than tripled.

The filing caps a remarkable turna-

round for a company that encountered

serious growing pains in 2016 after an

over-aggressive expansion disrupted its

supply chain and allowed rivals to grab

market share. The company now has

designs on displacing Apple Inc at the

top of the market as it ramps up a global

expansion.

In an open letter reminiscent of Goog-

le’s own pre-IPO manifesto, Lei pledged

to transform Xiaomi into more than a

hardware company and again promised

to cap its hardware profit margins at 5% –

returning any excess to its users.

“We are building an open global eco-

system, and not a walled garden,” said Lei,

who with co-founder Lin Bin will continue

to control the post-IPO company through

a special class of shares.

“I believe we can create a paradigm

shift of eff iciency in the business world

and use technology to improve the lives

of many.”

Xiaomi, reporting detailed financials for

the first time, posted a net loss of 43.9bn

yuan in 2017, reversing from a meagre

profit a year earlier. Some of that however

reflected one-time items such as share-

based compensation and changes in the

value of preferred shares, the company

said in its filing.

Excluding those, operating profit

reached 12.2bn yuan.

The company is taking advantage of

changes by Hong Kong that allowed com-

panies with diff erent share classes to list.

The filing didn’t mention how much

it’s looking to raise, with the number of

shares and price among details redacted

from the document.

It’s a big win for Hong Kong Exchanges

& Clearing Ltd, whose off icials spent years

pushing to scrap a ban on the weighted

voting rights that give founders control

even with minority ownership.

Xiaomi’s decision, four years after

Alibaba Group Holding Ltd chose New

York, signals a new phase for the city’s

ambitions to rival the US market.

“Investors will like Xiaomi’s business

model because growing user numbers

guarantee profits in the future,” said

James Yan, an analyst at Counterpoint.“A

bigger hardware user base will translate

to stronger profitability from services and

at the ecosystem end.”

Xiaomi was little-known in 2014 when it

became China’s third-largest smartphone

vendor, trailing only Apple and Samsung

Electronics Co. Selling phones with the

latest processors and features at half the

price of competing devices, it used buzzy

flash sales to attract online customers

mostly ignored by competitors.

At its height, it raised $1.1bn in venture

capital and became the world’s most

valuable startup. It sold investors on a

promise that it was not just a smartphone

maker, but that it would use phones as

a mechanism to sell services and ads to

customers.

Then it tried to expand too fast over-

seas and competitors undercut Xiaomi on

price, copied its online sales model and

locked in retailers in rural areas to capture

first-time buyers.

It looked destined to become an in-

dustry laughing stock, with market share

sinking to fifth in China and seventh place

globally, according to IDC.

Lei scaled back international opera-

tions and instead focused on India, where

it’s now the top seller alongside Samsung.

He personally took charge of the sup-

ply chain and ramped up investments

in dozens of businesses that made eve-

rything from fitness monitors, luggage,

water purifiers, rice cookers and personal

scooters. To reach more customers, Xi-

aomi went physical: it now operates more

than 500 brick and mortar retail stores,

mostly in China and India.

On Thursday, it announced a deal with

billionaire Li Ka-shing’s CK Hutchison

Holdings Ltd that’ll get its phones and

other gadgets into the company’s 17,700

retail and telecom stores, particularly in

Europe.

ZTE’s chairman Yin Yimin speaks at a news conference in Shenzhen, Guangdong province. Trading of ZTE shares has been suspended in Hong Kong and Shenzhen since April 17, after the US Commerce Departmentimposed a seven-year ban on buying American-made chips.

US-China talks end in discord as demands show wide rift

Bloomberg Beijing

Two days of US-China trade discussions ended in Beijing

with an agreement to keep on talking, and little else.

China’s off icial Xinhua News Agency reported Friday

afternoon that both sides reached a consensus on some

trade issues while acknowledging major disagreements on

some matters.

It said they would continue discussions, without provid-

ing specifics for when they would start again.

Neither side briefed the media, and the US delegation led

by Treasury Secretary Steven Mnuchin departed Beijing in

the evening. While a cure-all deal was always a long shot,

the discord between the world’s two biggest economies

means skittish global markets will continue to face ongoing

trade tensions. The immediate question is whether the US

got enough wins to delay planned tariff s of up to $150bn on

Chinese imports.

President Donald Trump told reporters at the White

House Friday on his way to board the Marine One presiden-

tial helicopter that “we will be doing something one way or

another with respect to what’s happening with China.”

He said he has “great respect” for Chinese President Xi

Jinping “and that’s why we’re being so nice.” But, he added,

“we have to bring fairness to trade between the US and

China. And we’ll do it.” Trump didn’t elaborate further.

“A disagreement over trade practices that has built up

over more than two decades will take much more than two

days to resolve,” said Shane Oliver, the head of investment

strategy at AMP Capital Investors Ltd in Sydney. “A negoti-

ated solution remains most likely but it will take time with a

lot of posturing and near-death moments along the way.”

Heading into the talks, both sides outlined a series of

tough demands, with the US focused on reducing a deficit

in goods that reached a record $375bn last year.

The US delegation asked China to reduce support for

high-tech industries, allow US companies non-discrimina-

tory access in China and cut the trade deficit by at least

$200bn by the end of 2020 from 2018, according to a docu-

ment seen by Bloomberg.

Pakistan monetary expansion, credit off take slow down: SBPInternews Karachi

While the government of Pa-kistan relied heavily on 8-month data for achieving

5.8% economic growth in FY18, the State Bank of Pakistan (SBP) yester-day disclosed that during the fi rst 10 months both monetary expansion and the private sector borrowing were lower than last year’s corresponding fi gures.

The monetary expansion during July-April 2017-18 was 4.13% compared to 6.29% during the same period of 2016-17.

In terms of liquidity, the expansion during the fi rst 10 months stood at Rs-603bn versus to Rs807bn in the same period of FY17.

Greater monetary expansion is a sign of higher economic activity while an interest rate scenario with low infl ation is highly attractive for monetary expan-sion and active participation of private sector.

The SBP reported that during the re-viewed period, the private sector bor-rowing from the banking system was Rs498.5bn compared to Rs517bn in cor-responding months of 2016-17. Despite low interest rate and infl ation, the pri-vate sector did not show enthusiasm for its higher participation in the economic growth.

Pakistan had achieved a growth rate of 5.3% with a monetary expansion of 13.69% in FY17. At the end of almost ten months of 2017-18, monetary ex-pansion was just 4.13%, making it seem impossible to achieve the 13% fi gure (or additional 9%) in the remaining two months.

Water shortage is emerging as a crisis for the agriculture sector which is be-lieved to achieve 3.8pc growth in FY18. Water availability for Kharif and Rabi seasons was down by 2% and 18.5%, re-spectively.

The government believes to at-

tain higher large-scale manufacturing (LSM) growth which stood at 6.24% in the fi rst eight months of 2017-18 while the energy crisis has been worsening as the summer approaches.

Textile, which has the adjusted

weight of 29.74% in the basket of LSM, actually went down to 0.47% growth compared to last year’s 0.58%. Food, beverages and tobacco with adjusted weight of 17.59pc rose by 2.33% against 7.12% in the same period of FY17.

The government heavily relies on au-tomobile and iron and steel sector for its higher LSM growth rate. The automo-bile sector, with a share of 6.56%, in-creased by 19.58% versus 10.08% in the corresponding period of 2016-17.

Similarly, iron and steel with a weight of 5.39%c grew by 30.85% compared to 16.15% in the same period of FY17. The production of iron and steel has in-creased despite zero production from Pakistan Steel.

Uptickobserved in Pakistan weeklyinfl ationInternews Islamabad

Pakistan’s infl ation for the combined income group went slightly up 0.23%

for the week ended on May 3 as compared to the previous week, mainly due to increase in prices of non-perishable products.

The weekly infl ation, meas-ured through the Sensitive Price Ondex (SPI), went up after deceleration in the last week, according to data issued by Pakistan Bureau of Statistics yesterday. SPI monitors prices of 53 items based on a survey of 17 cities and 53 markets.

Prices of 18 items increased and those of 08 items decreased during the period under review. Prices of 27 items remained un-changed. The impact of prices on various income groups also witnessed variations during the week under review.

For the lowest income group (earning up to Rs8,000 a month), SPI grew 0.06% over the previous week, while infl ation for the top income group (earning Rs35,000 and above) was increased by 0.33%. On a yearly basis, SPI for the combined group in the week under review witnessed a slight decline of 1.71%.

The food items whose prices rose included tomatoes 12.7%, bananas 6.5%, potatoes 5.2%, gur 1.6%, chicken farm 1.4%, red chilly powder 1.3%, eggs 0.92%, mutton 0.39%, mustard oil 0.32%, garlic 0.13%, pulse masoor 0.12%, pulse moong 0.09%, vegetable ghee 0.04%, and cooked beef 0.02%.

BUSINESS

Gulf Times Sunday, May 6, 20184

The monetary expansion in Pakistan during July-April 2017-18 was 4.13% compared to 6.29% during the same period of 2016-17. In terms of liquidity, the expansion during the first 10 months stood at Rs603bn versus to Rs807bn in the same period of FY17, the State Bank of Pakistan said yesterday.

Australia says budget focus on tax cuts for companies, workersBloombergMelbourne

Australia’s government will focus on its plans to cut company tax rates and provide relief for low-and- middle income earners as it outlines its annual budget next week, according to ministers.Prime Minister Malcolm Turnbull’s Liberal-National coalition government, facing a national election due next year, is expected to set out cuts to income taxes and funding for public-transport infrastructure in major cities in Tuesday’s budget.The government remains “committed to pass our business tax cuts in full,” Finance Minister Mathias Cormann was quoted Saturday as telling the Herald Sun newspaper in an interview.Turnbull wants to cut company tax rates to 25% from 30% over a decade in a bid to increase

jobs and wages. “The future job opportunities, job security and wage increases for families around Australia wanting to get ahead depend on the future success and profitability of the businesses that pay them and pay their wages,” Cormann was quoted as saying.Australia’s government will off er tax relief measures in the budget to workers earning less than A$87,000 ($66,000) a year, the Australian newspaper cited Treasury Chief Scott Morrison as saying in an interview also published yesterday.The government’s “first priority is to maximise and target tax relief to low and middle-income earners,” Morrison said.The income tax cuts won’t be at “the expense of slugging others on the false pretext that they don’t pay enough tax,” he said.Australia needs to do more to combat tax evasion and will continue to closely monitor welfare spending, Morrison was quoted as telling Fairfax Media in a separate interview.

Australian Prime Minister Malcolm Turnbull speaks at a news conference after a meeting with Nato Secretary-General Jens Stoltenberg at the Alliance’s headquarters in Brussels. Turnbull wants to cut company tax rates to 25% from 30% over a decade in a bid to increase jobs and wages.

One-hour fl ight from Singapore is world’s busiest overseas routeBloombergSingapore

A one-hour flight link-ing one of the smallest countries on the planet

with its next-door neighbour is the world’s busiest interna-tional route.

Planes made 30,537 trips be-tween Singapore and the Ma-laysian capital Kuala Lumpur in the 12 months to February, according to a report by OAG Aviation Worldwide Ltd.

That’s the equivalent of 84 flights a day in a city state with a population of just 5.6mn.

In a top-20 list dominated by Asia, the highest-ranking route outside the region ran between New York and To-ronto.

There were 16,956 flights on that leg.

The trip between Dublin and London Heathrow ranked 14th and was the busiest European entry with 14,390 flights.

In terms of passenger num-bers, Hong Kong-Taipei tops the list with 6.5mn people fly-ing that route in the 12-month period, the report showed.

That’s followed by Jakarta-Singapore with 4.7mn and Kuala Lumpur-Singapore with 4mn.

Asia is the world’s fastest-growing travel market.

But even the most frantic in-ternational routes don’t come close to the most popular do-mestic flights.

The world’s busiest air route, bar none, is between Seoul and a tiny island off the coast of South Korea.

Planes made 65,000 trips between the South Korean capital and Jeju island in 2017, according to OAG.

Cohen’s Point72 plans Asia expansionBloombergHong Kong

Steven A Cohen’s Point72 Asset Management plans to further ex-pand its Asia business after a two-

year hiring spree in Hong Kong.The fi rm now employs about 93 people

in the city, up from 58 at the end of 2015, Howard Man, who leads the equity long- short business in Asia ex-Japan, said in an interview.

On Thursday, it opened a new 25,000-square-foot offi ce that can po-tentially house more than 160 people, doubling the amount of space from its former premises. “We continue to look to grow,” said Man, who oversees the discre-tionary portion of Point72’s stock strate-gies in the region. While the Stamford, Connecticut-based fi rm doesn’t have a specifi c hiring target, it sees “tremen-dous” opportunities in Asia markets, he said, citing the potential for economic growth in countries such as China and In-donesia, and improving market liquidity.

The recent expansion in staff and offi ce space is one of the most aggressive among global hedge funds in Asia.

The fi rm has been a training ground for hedge fund analysts and managers in the region, with some going on to found their own funds. Point72 and its predecessor have operated in Hong Kong, its oldest Asia offi ce, since 2006.

Billionaire Cohen started his hedge fund SAC Capital Advisors in 1992 and returned an average 30% a year before becoming embroiled in an insider-trading

scandal in 2013. The Asia hiring spree took place as Point72 prepared to start accept-ing client money again after a US ban on Cohen trading outside capital was lifted early this year. Since then, it has raised al-

most $3.3bn of outside money, taking to-tal assets to about $12bn. Point72 employs 10 fund managers and junior fund man-agers who bet on rising and falling stocks in its Hong Kong and Singapore offi ces,

more than double the number 2 1/2-years ago, Man said.

Including its Tokyo offi ce, it now em-ploys almost 160 people in Asia, up about 70% since the start of 2016, he said.

Cohen: On a hiring spree for Asia expansion.

‘Philippine price pressures spreading’

BloombergManila

Inflation pressures in the Philip-

pines are spreading into the

wider economy, central bank

governor Nestor Espenilla said,

adding further fuel to speculation

that policy makers may be ready

to raise interest rates next week.

“What we react to is whether

it’s spreading and its aff ecting

expectations,” Espenilla told

reporters on the sidelines of

the Asian Development Bank’s

annual meeting in Manila.“And

our reading, based on the latest

data, it seems to have spread

somewhat.”

Inflation may have acceler-

ated to as much as 4.7% in April,

the central bank said on April

30, boosted by higher oil and

rice prices. Economic Planning

Secretary Ernesto Pernia said on

Thursday that faster consumer-

price gains would be a sticky

issue for the rest of 2018.

Espenilla has so far refrained

from raising interest rates, even

though the economy is growing

more than 6% and inflation is

picking up. The central bank’s

forecasts from March show that

while inflation may exceed the

4% upper limit of the target range

for a few months this year, that

breach may only be temporary.

BUSINESS5Gulf Times

Sunday, May 6, 2018

BloombergMelbourne

BP Plc is weighing an acquisition of some of BHP Billiton Ltd.’s en-ergy assets as the British oil ma-

jor seeks more US shale, according to people familiar with the matter.

The London-based company is working with Morgan Stanley to ad-vise on the plans, said the people, ask-ing not to be identifi ed as the matter is private.

BP is weighing teaming up with oth-er suitors or swapping conventional assets – where oil and gas typically fl ow more easily to the surface than shale – with BHP, they said.

BHP is selling 800,000 net acres in the Eagle Ford, Permian, Haynseville and Fayetteville Basins it has said are worth at least $10bn.

It is preparing to sell those assets in up to seven packages, including three in highly-prized Permian, people fa-miliar with the matter said this month.

It’s not clear which of those assets BP wants to buy.

Shares of BHP rose 0.1% to A$31.56 at 11:16am Friday in Sydney.

No fi nal decisions have been made, and BP could decide against proceed-ing with a formal bid, the people said.

Spokesmen for BP, BHP and Morgan Stanley declined to comment on the sale.

BP held Permian properties until 2010, when it sold a number of such assets to raise cash for expenses tied to its Gulf of Mexico oil spill.

It has since considered various op-tions for the area, “but it’s been really hard” in the past three to four years to fi nd deals that add to earnings, chief fi nancial offi cer Brian Gilvary told Bloomberg News last month.

The company is looking at BHP’s Permian assets, he said.

BP is working to regain the trust of shareholders, who are urging it to maintain fi nancial discipline.

The largest oil companies overspent during the days when oil was above $100 a barrel, eroding returns when

prices dropped. Gilvary said fund-ing a deal in the Permian would be “tough” within BP’s current capital constraints.

Data rooms are open and bids are due by June, the Melbourne, Austral-ia-based mining company said last month.

It could announce one or more transactions by the end of December.

BHP said it’s also evaluating asset swaps, an initial public off ering or po-tentially spinning off the division.

BHP disclosed plans to sell its on-shore US division last summer after activist investor Elliott Management Corp said its foray into shale had wiped out $40bn.

The company, which spent $20bn on two US oil and gas acquisitions in 2011, said in November the divestiture proc-ess could take two years.

Royal Dutch Shell Plc is also poten-tially interested in BHP’s Permian ba-sin assets, Andy Brown, its upstream director, said in an interview in Feb-

ruary. Explorers can spend as little as $15 a barrel to drill in the Permian, the main source of the current surge in US output.

Shell and Blackstone Group LP are planning a joint $10bn bid for BHP’s US assets, Sky News reported in March, citing sources it didn’t identify.

Shell already has about 280,000 net acres in the Permian, according to its website, with a sizable position near BHP’s assets in a fast-growing part of the Permian known as the Delaware

Basin. BP, which now lacks a meaning-ful presence in the Permian, controls 3.1mn net developed acres in other shale fi elds in Texas, Arkansas, Colo-rado, and elsewhere in the US that primarily produce gas, according to its annual report.

A measure of its fi rst-quarter profi t rose to $2.59bn, the highest since 2014, the company reported on Tuesday.

That surpassed analysts’ forecasts.Its shares this week rose to their

highest level since May 2010.

BP to tap Morgan Stanley as it weighs buying BHP assets

Toyota bets $1.1bn on SUVs in Canada with Trudeau helpBloombergOttawa

Toyota Motor Corp is investing C$1.4bn ($1.1bn) in its Canadian operations to build traditional and hybrid RAV4 sport utility ve-

hicles, banking on the nation’s manufacturing sec-tor amid a cloud of uncertainty from Nafta talks.

The Japanese automaker’s Canadian unit made the announcement on Friday afternoon at its plant in Cambridge, Ontario, alongside Prime Minis-ter Justin Trudeau and Ontario Premier Kathleen Wynne.

The expansion there and in nearby Woodstock will create 450 jobs, supported by C$110mn each from the federal and provincial governments.

The two Toyota plants west of Toronto now employ about 8,000 people and made more than 600,000 vehicles last year.

The investment will allow Canada to built a “hy-brid ecosystem,” becoming the largest producer of hybrid Toyotas in North America and supporting Canada’s supply chain of auto-part markets, Tru-deau said. “This is a great day for the auto sector,” he said.

Toyota and other automakers are shifting focus to meet consumers’ growing preference for SUVs over cars.

Toyota, the world’s second-biggest carmaker, has already announced it will move assembly of the

Corolla compact to the US to make room for RAV4 output.

During 2017, Toyota sold 407,594 RAV4s in the US, topping Camry sedan sales for the fi rst time.

“That type of investment is very good news for the province – at the same time it’s long overdue,” Rob Wildeboer, executive chairman at auto-parts maker Martinrea International Inc, said in an in-terview on BNN Bloomberg television Friday. “We have not been punching above our weight in On-tario.” He called for lower corporate taxes to boost Canadian competitiveness.

The auto industry is at the heart of ongoing North American Free Trade Agreement talks, with minis-ters due to meet Monday in Washington.

The US wants more cars and auto parts made in North America and is proposing to raise the share of content sourced from the region to 75% from the current 62.5%.

The countries are pushing for a deal in principle this month in hopes of passing it in the current US congress, and before Mexico’s July 1 elections.

Toyota will also invest in Canadian research and development over 10 years, and create 1,000 new co-op placements with the announcement.

New RAV4s, including hybrids, will be built at the two Ontario plants, Toyota Motor Manufac-turing Canada President Fred Volf said at the news conference. “We’re aggressively adopting new technology and innovative processes to ensure our ongoing success,” Volf said in a statement.

The logo of BP is seen at a petrol station in Kloten, Switzerland. BP is working to regain the trust of shareholders, who are urging it to maintain financial discipline.

Goldman-backed JRE sets 2025 wind target in Japan power driveBloombergTokyo

A Japanese clean energy developer backed by Goldman Sachs Group Inc and Singapore’s sovereign wealth fund aims to focus on wind into the next decade as the nation seeks to diversify its renewable power sources.Japan Renewable Energy Corp is seeking to increase the capacity of wind power projects, both operating and under construction, to 1.3 gigawatts by 2025, from 47 megawatts now, executive off icer Koki Yoshino said in an interview last week.That will raise its total portfolio of producing and planned projects during that period to 2 gigawatts, up from 424 megawatts.The company’s focus on wind comes amid falling rates in Japan for solar power producers and growing support from the government for wind to diversify

the nation’s renewable power generation.Solar currently accounts for more than 80% of JRE’s renewable capacity in operation or under construction, according to Yoshino.Japan aims for renewables to make up as much as 24% of its power generation mix by fiscal year 2030, up from 12% in 2016.“We will achieve our targets first with onshore wind projects,” he said. “Wind took a long time for us because of the environmental impact assessments, but we are ready for these stations starting this year and next.”Unlike solar, large-scale wind projects need to complete environmental impact assessments, which usually take four years, before construction can start.The assessment process length and costs, between ¥100mn and ¥200mn ($915,000 to $1.8mn), often deter less-committed developers, according to Yoshino.

“There are fewer players in the wind market compared with solar as there is a barrier to entry,” Yoshino said.JRE is currently developing two off shore projects: a 180-megawatt station in the northern prefecture of Akita and a 240-megawatt farm in Nagasaki in southwestern Japan.The Nagasaki project is expected to start sooner as it secured access to the grid and has the potential to expand to 1 gigawatt, he said.In total, it has at least 13 onshore and off shore wind projects in varying stages of development.Singapore’s GIC Pte announced in October it invested in JRE’s parent, GS Renewable Holdings GK.The companies haven’t disclosed the ownership stakes.JRE currently has 265 megawatts of capacity producing, including solar farms with almost 224 megawatts and wind projects with 32 megawatts, as well as a 9.6 megawatt combined project, according to its website.

Toyota is investing C$1.4bn ($1.1bn) in its Canadian operations to build traditional and hybrid RAV4 sport utility vehicles, banking on the nation’s manufacturing sector amid a cloud of uncertainty from Nafta talks.

No one can turn clock back onglobalisation, says Indian minister

IANSNew Delhi

Noting that India’s in-creasing engagement in international trade has

been crucial in the country be-coming a $2.5tn economy, Com-merce Minister Suresh Prabhu said on Friday that despite pro-tectionist challenges to it from time to time, globalisation has come to stay as a durable phe-nomenon.

Addressing the 52nd convoca-tion here of the Indian Institute of Foreign Trade (IIFT), Prabhu said for the fi rst time since the creation of the World Trade Or-ganisation (WTO), serious chal-lenges are being posed to global trade, without specifying the recent protectionist measures of the US.

“Nobody can turn the clock back on globalisation...it has happened. Consider that trade came fi rst and it is much later that globalisation has developed as a concept,” he said.

“There are a lot of challenges around... For the fi rst time since the WTO was created, there is a real challenge to the entire global trading system.

“While some countries are questioning its very rationale, some others are creating hur-dles to the free fl ow of goods and services,” the minister said.

He noted that more than half a century ago, India’s GDP was less than $50bn and she had “never thought then of integrat-ing with the rest of the world”.

“Integration of India with glo-bal trade has signifi cantly con-tributed to economic growth and the result is a $2.5tn economy,” he said. “India’s economic en-gagement with the world began with an entire change in strat-egy...from import substitution we moved towards an export ori-entation,” he added.

In March, US President Don-ald Trump slapped import tariff s of 25% on steel and 10% on alu-minium, unfolding the prospect of an all-out global trade war. China retaliated in April impos-ing tariff s as high as 25% on 128 American products.

“There are a lot of challenges around. For the first time since the WTO was created, there is a real challenge to the entire global trading system,” India’s Commerce Minister Suresh Prabhu said.

Japan Renewable Energy is seeking to increase the capacity of wind power projects, both operating and under construction, to 1.3 gigawatts by 2025, from 47 megawatts now, executive off icer Koki Yoshino said in an interview last week. That will raise its total portfolio of producing and planned projects during that period to 2 gigawatts, up from 424 megawatts.

Alibaba expects 60% surge in revenue this fi scal yearBloombergHong Kong

Alibaba Group Holding Ltd pre-dicted a surprise acceleration of sales as the Chinese e-com-

merce giant unleashes spending to sus-tain growth in cloud computing, logis-tics and supermarkets.

The company expects revenue to surge 60% in the year ending March, boosted by its purchase of food delivery startup Ele.me and transport business Cainiao.

Even without those acquisitions, Ali-baba sees sales rising 50%, ahead of the 42% projected by analysts.

Billionaire founder Jack Ma’s deal spree is taking the Hangzhou-based company into more of the offl ine world, giving it a logistics business, a chain of supermarkets and a fl eet of couriers bringing meals to the front doors of us-ers.

While that’s helped make Alibaba less reliant on the Chinese online mar-ketplaces that generate most of its sales, it has come at a cost, with its operating margin shrinking 10 percentage points in the March quarter.

On Friday, executives emphasised they’ll continue to spend to grow mar-ket share and keep growth humming – potentially at the expense of profi t-ability.

“The results were very strong, it was much better than people were expect-ing,” said Julia Pan, a Shanghai-based analyst at UOB Kay Hian. “People might be less concerned about the mar-gin compression now because of Ali-baba’s better-than-expected top-line guidance.”

The US-traded shares rose 1.7% to $185.55 at 11:43am in New York.

Alibaba also reported fourth-quarter sales and earnings that topped esti-mates.

Revenue rose 61% to 61.9bn yuan ($9.7bn) in the three months ended March, compared with the 59bn yuan average estimate.

Net income fell 29% as spending bal-looned.

“The margin structure is completely

diff erent, its quality of earnings is drop-ping,” said Steven Zhu, an analyst with Pacifi c Epoch.

And “its core business is going through deceleration.”

The company’s deals are part of Ma’s ambition to revamp a $4tn retail sec-tor, a vision echoed by Amazon.com Inc.’s Jeff Bezos via the acquisition of Whole Foods Market Inc Arch- foe Tencent Holdings Ltd has also invested

in a slew of supermarkets and retailers in recent months. But Alibaba on Fri-day signalled its willingness to beat ri-vals back.“We’re going to be extremely competitive,” vice chairman Joseph Tsai said on a conference call.

Alibaba has been pushing to revamp brick-and-mortar retailing with tech-nology, bringing its skills in ordering, marketing and fulfi lment to supermar-kets and other stores in China.

It’s also taking renewed steps over-seas by taking control of Lazada Group SA to provide an e-commerce platform across Southeast Asia.

The company plans to keep spending as it seeks to fend off JD.com Inc, which is backed by Tencent.

In the March quarter, sales from core commerce rose 62% to 51.3bn yuan while cloud unit revenue more than doubled to 4.4bn yuan. The digital

media and entertainment unit boosted sales 34% to 5.3bn yuan. It reported adjusted earnings per share of 5.73yuan versus the 5.5yuan average estimate.

“New Retail, Cainiao, Lazada, Ele.me: we’re going to continue to expand our business by investing,” chief fi nan-cial offi cer Maggie Wu said. “Having this new retail kick in and becoming more important, our margin structure may shift.”

Gift to family wipes $2.6bn off Indian jeweller’smarket value

BloombergMumbai

An Indian jeweller that saw its market worth reach $3.6bn at the start

of the year is now fl oundering at about a quarter of that value after one of its founders gifted some shares to family members, raising concern about the com-pany’s governance.

PC Jeweller Ltd slumped about 40% in the past week after the company said that one of its founders, PC Gupta, made the gifts in off -market trades.

While the shares rebounded 44% on Friday, they’re still down 70% from the January 19 record and the company’s market value has shrunk to Rs68.9bn ($1bn).

“Investors are concerned about the quality and timeliness of the company’s disclosures,” said Devansh Lakhani, director at investment advisory fi rm La-khani Financial Services Ltd.

There was speculation that family members may be sell-ing shares in the open market though recent management comments have assuaged some of those concerns, he said.

The claims were baseless and the founders were “very much invested in the company as they still hold 58% stake,” PC Jewel-ler chief fi nancial offi cer Sanjeev Bhatia said in an interview. “We have done everything and said everything. There is nothing ex-tra that I could say about this.”

In response to questions from investors, the company said in the April 25 fi ling that it wasn’t aware of a reason for the sudden plunge that day in the stock.

It denied that any founders had sold shares on the market, but revealed Gupta had made the gift of an undisclosed number to “his family member (s).” The company said it makes timely disclosures and its fundamentals remain strong.

PC Jeweller has suff ered once before this year after Vakrangee Ltd, which had been a share-holder, was reported to be under regulatory investigation.

Vakrangee said at the time that it hadn’t received any of-fi cial communication from the regulator. The company no long-er holds a stake in PC Jeweller, Bhatia said.

Fidelity International’s FMR LLC is among investors that have pared exposure to the jew-eller, having cut holdings to 3.5% from 7.04%, according to a May 3 disclosure.

An April fi ling had put FMR’s stake at 9.5%. Jewellers in India are having a tough year.

The industry has come under a cloud with two companies un-der investigation for an alleged banking fraud of $2bn.

BUSINESS

Gulf Times Sunday, May 6, 20186

Jack Ma, founder of Chinese e-commerce giant Alibaba, meets Thailand’s Prime Minister Prayuth Chan-ocha in Bangkok. The billionaire founder’s deal spree is taking the Hangzhou-based company into more of the off line world, giving it a logistics business, a chain of supermarkets and a fleet of couriers bringing meals to the front doors of users.

Cash-rich Thai explorer eyes assets worth up to $1bnBloombergBangkok

Thailand’s PTT Exploration & Production

Pcl is ready to shell out as much as $1bn

on an overseas petroleum asset this

year, and possibly more, as it tries to

prop up growth amid falling reserves.

The upstream unit of state-controlled

PTT Pcl is in talks to purchase a stake in

oil, natural gas or liquefied natural gas

assets in Southeast Asia and the Middle

East, chief executive officer Somporn

Vongvuthipornchai said in an interview

on Thursday in Bangkok.

One or more deals could be finalised

this year, he said.

PTT E&P, which has amassed $5bn in

cash and marketable securities, is on

the hunt for deals after crude’s slump

shook up the industry.

While the company weathered the

downturn by cutting costs and invest-

ments, it hasn’t revived reserves, which

have dropped every year since a peak of

about 1.1bn barrels in 2009.

Its 631mn barrels of proved reserves

are enough to last five years at current

production rates.

“We would finalise one or more deals

this year with the size in a range of

$300mn to $1bn per deal,” Somporn

said.

The company plans to boost its re-

serves to sustain seven years of output

through mergers and acquisitions, he

added.

PTT E&P will favour projects in

Southeast Asia, but is also looking in the

Middle East where low production costs

could help withstand price volatility,

according to Somporn.

Global benchmark Brent crude

reached a nadir below $30 in 2016 and

last month exceeded $75.

The company will accelerate final

investment decisions on key develop-

ments, including an LNG venture in

Mozambique, and is seeking to reach an

FID with its partners on a Vietnam gas

project as soon as this year.

Closer to home, it has teamed up with

Total E&P Thailand to renew its conces-

sion for the Bongkot gas field, and is

negotiating with Chevron about boost-

ing its stake in the Erawan project.

“We’ve been operating the Bongkot

gas field for 20 years with a good track

record and competitive costs,” Somporn

said. “We’re in a good position for the

bidding.” PTT E&P shares climbed as

much as 1.5% to 138.50 baht, the high-

est intraday level in more than a week,

bucking a 0.1% decline in the bench-

mark SET index.

The company targets sales volume of

about 300,000 barrels of oil equivalent

a day this year, similar to the levels in

2017.

It has set aside $15bn for investments

over the next five years, and is seeking

opportunities in LNG plants, power

generation, battery storage and decom-

missioning old wells.

“We’ve been working on M&A activi-

ties over the past two years but it’s quite

difficult to reach a deal,” Somporn said.

“Sellers do not want to sell, while

we’re selective.”

How Samsung fell behind Sony and LG in premium TV marketReutersSeoul

At the 2013 annual Consumer Electronics

Show in Las Vegas, flashy organic light-

emitting diode (OLED) televisions sport-

ing credit card-thin screens were at the

front and centre of Samsung Electronics’

new gadgets display.

Later that year, the South Korean

company splurged on marketing the

televisions – which then retailed at around

$10,000 for the 55-inch model – to the ul-

tra wealthy. Among the promotions was a

penthouse party for the residents of One

Hyde Park in London, labelled the world’s

most expensive residential block.

But by 2015, it had stopped making

OLED TVs, saying the market was not

ready to embrace the high costs of the

technology – based on thin films of

carbon-based modules that light up in

response to electric current. Instead it

decided to focus on developing liquid

crystal display screens that are backlit and

enhanced with so-called quantum dots,

semiconductor nanocrystals that produce

colours and can improve picture quality.

These are known as QLED TVs.

It appears to have been a costly mis-

step. OLED TVs have become a dominant

technology in the premium market – that

is for a TV of at least 55 inches in size cost-

ing more than $2,500 – as the cost of pro-

ducing them has dropped dramatically.

Samsung is now the only major TV

manufacturer not to produce OLED

screens. And while the TV business gener-

ates less than 3% of Samsung’s profit,

which largely comes from its semiconduc-

tor and mobile phones businesses, the

loss of the leadership of the premium,

higher-margin market is a hard blow.

“It was based on an objective appraisal

of technological and cost competitive-

ness,” Jongsuk Chu, head of sales and

marketing for Samsung’s TV business,

told Reuters in a statement, referring to its

decision to discontinue making OLED TVs.

A look at online reviews of both OLED

and QLED TVs in the past couple of years

indicate that OLED TVs made by South

Korea’s LG Electronics and Japan’s Sony

gained fans because of the quality of the

picture. In particular, reviewers cited more

realistic colours and high resolution, as

well as attractive designs and increasingly

reasonable prices.

That doesn’t mean the Samsung QLED

TVs don’t have their supporters. Picture

quality has also improved and prices have

dropped but they don’t tend to be review-

ers’ top picks.

“OLED TV’s jump in premium TV mar-

ket share is a direct result of its outstand-

ing picture quality,” said Ross Young, CEO

of research provider Display Supply Chain

Consultants. “Samsung may have misste-

ped in their 2017 product by emphasising

design over picture performance.”

Samsung last year only got an 18.5%

share of global sales for premium TVs,

based on dollar revenue, down from

54.7% in 2015, according to research firm

IHS Markit. Meanwhile, Sony and LG have

leapfrogged Samsung to grab 36.9% and

33% of the market respectively.

To be sure, Samsung remains the big-

gest maker of TVs in the world – a title it

has now held for 12 years. It also claims to

be No1 in premium TVs, with more than

a 40% market share, based on data from

GfK. These figures include 55-inch TVs

that are cheaper than the $2,500.

Samsung Electronics’ decision to base

its TV business on LCD technology was

made after it took the advice of Samsung

Group’s now-defunct Corporate Strategy

Off ice, a source with knowledge of the

matter said.

“The off ice made a suggestion that

it would be more profitable to focus

on LCDs than switching to less-proven

OLED,” said the source, who declined to

be named due to the sensitivity of the

matter.

The reasons: the TV business was bat-

tling falling profits and the company felt

LCD technology could be more profitable

than high cost OLED, the source said.

The only problem was that around the

time this decision was being taken, LG was

developing a much more eff icient manu-

facturing process to make OLED screens.

The retail price of a mainstream LG

55-inch OLED TV has dropped to just 3mn

won ($2,811) this year from 15mn won

($14,056) in 2013, LG said.

It is not the first time decisions involv-

ing Samsung’s Corporate Strategy Off ice

have been questioned. The off ice was

closed after it faced criticism during the

political scandal that led to the arrest of

the group’s heir Jay Y Lee last year on

charges of bribery and embezzlement.

Lee, who denies any wrongdoing, walked

out a free man in February after an ap-

peals court suspended his sentence.

Samsung told Reuters the biggest rea-

son it is not making OLED TVs is the issue

of screen burn-in, referring to a form of

image retention when an image has been

on the screen for a long time.

“We concluded that OLED is unfit for

large screens, as it can shorten product

life when tasked to produce bright im-

ages,” said Samsung’s Chu.

LG, though, says on its US website that

while burn-in is possible on almost any

display, it has addressed the issue through

technology that protects against damage

to the screen and rectifies short-term

problems.

The struggle’s impact on corporate

results became clearer last month. LG said

on Thursday its TV division recorded a

77% jump in quarterly profit and a record

profit margin of 14% in the quarter ended

in March.

Samsung reported a 32% quarterly

profit decline last Thursday for its con-

sumer electronics division that sells TVs

and home appliances, saying that earn-

ings fell from a year ago, partly because

it had changed its lineup and stopped

selling some lower and mid-priced TVs.

Sony, whose television business

incurred losses totalling ¥800bn ($7.4bn)

over ten years, swung back to a profit in

the year ended in March 2017.

To return to profit, the Japanese

company reduced the number of markets

around the world in which it sells, diversi-

fied suppliers and off ered both OLED and

LCD screens. It also ditched an LCD joint

venture with Samsung.

The strategy paid off . While Sony had

just 10.2% share in the global TV market

last year in dollar terms, it was No 1 in

the premium market. Its operating profit

margin reached 10.7% in the September-

December quarter, according to John Soh,

analyst at Shinhan Investment.

The outlook for Samsung in premium

TVs could worsen as 71% of sales this year

are expected to be OLED TVs, up from 51%

last year, according to IHS.

And this is all happening with the 2018

FIFA World Cup starting in June. The

month-long soccer competition, which is

being held in Russia this year, is consist-

ently the most watched TV event in the

world and provides TV makers with a

great opportunity to boost sales.

Choong Hoon Yi, head of UBI Research

and a former Samsung display engineer,

said that it now “looks like Samsung made

a mistake” though it did not seem a blun-

der at the time, as Samsung considered

the OLED technology too immature.

When asked about whether it plans

to restart OLED TV production and

sales, Samsung said that it will lead the

premium market by focusing on QLED

and micro-LED technology, which uses

miniature light emitting diodes to improve

picture quality.

“There’s no change (in our strategy),”

Jonghee Han, president of Samsung’s TV

business told reporters last month.

Some display analysts say all might

not be lost as Samsung can fight back on

price.

At the 2013 annual Consumer Electronics Show in Las Vegas, flashy organic light-emitting diode televisions sporting credit card-thin screens were at the front and centre of Samsung Electronics’ new gadgets display. Later that year, the South Korean company splurged on marketing the televisions – which then retailed at around $10,000 for the 55-inch model – to the ultra wealthy.

Weekly Market Report

The Qatar Stock Exchange (QSE) index decreased 282.25 points, or 3.11%, during the trading week

to close at 8,805.76. Market capitalisa-tion decreased by 3.49% to QR488.5bn versus QR506.2bn at the end of the previous trading week. Of the 45 listed companies, six ended the week higher, while 36 declined and three remained unchanged. Qatar General Insurance & Reinsurance (QGRI) was the best performing stock for the week with a gain of 3.16% on 6.4k shares traded. On the other hand, Ezdan Holding Group (ERES) was the worst performing stock with a decline of 17.34% on 1.6mn shares traded.

Ooredoo (ORDS), Masraf Al Rayan (MARK) and Barwa Real Estate (BRES) were the primary contributors to the weekly index decline. ORDS was the biggest contributor to the index’s de-crease, deleting 61.9 points from the index. MARK was the second biggest contributor to the mentioned losses, shaving 50.0 points off the index. More-over, BRES removed 17.2 points from the index. However, Industries Qatar (IQCD) added 35.8 points to the index.

Trading value during the week de-creased by 7.42% to reach QR1.23bn versus QR1.33bn in the prior week. The industrials sector led the trading value during the week, accounting for 34.86% of the total trading value. The banks and financial services sector

was the second biggest contributor to the overall trading value, accounting for 23.77% of the total trading value. Mesaieed Petrochemical Holding (MPHC) was the top value traded stock during the week with total traded val-ue of QR239.8mn.

Trading volume decreased by 8.74% to reach 51.16mn shares versus 56.0mn shares in the prior week. The number of transactions decreased by 5.50% to reach 18,243 versus 19,305 transac-tions in the prior week. The industri-als sector led the trading volume, ac-counting for 38.85%, followed by the telecoms sector which accounted for 18.23% of the overall trading volume. MPHC was also the top volume traded stock during the week with 13.8mn shares.

Foreign institutions turned bearish with net selling of QR24.3mn versus net buying of QR25.9mn in the prior week. Qatari institutions remained bearish with net selling of QR4.7mn versus net selling of QR32.4mn in the week before. Foreign retail inves-tors turned bullish with net buying of QR1.1mn versus net selling of QR2.8mn in the prior week. Qatari retail inves-tors remained bullish with net buying of QR27.9mn versus net buying of QR9.4mn the week before.

Foreign institutions bought (on a net basis) $226mn worth of Qatari equities since the beginning of 2018.

This report expresses the views and opinions of QNB Financial Services Co WLL One Person Company (“QNBFS”) at a given time only. It is not an off er, promotion or recommendation to buy or sell securities or other investments, nor is it intended to constitute legal, tax, accounting, or financial advice. We therefore strongly advise potential investors to seek independent professional advice before making any investment decision. Although the information in this report has been obtained from sources that QNBFS believes to be reliable, we have not independently verified such information and it may not be accurate or complete. Gulf Times and QNBFS hereby disclaim any responsibility or any direct or indirect claim resulting from using this report.

DISCLAIMER

The QSE index continued with its drop and closed down for the second week, it closed down 3.11% versus last week’s

closing. The index is challenging its mov-

ing averages, which may act as a support. If the index breaches below the 8,600 level, it could retrace back to the 8,000 weekly support.

Candlestick chart – A candlestick chart is a price chart that displays the high, low, open, and close for a

security. The ‘body’ of the chart is portion between the open and close price, while the high and low intraday movements form the ‘shadow’. The candlestick may represent any time frame. We use a one-day candlestick chart (every candlestick

represents one trading day) in our analy-sis.

Doji candlestick pattern – A Doji can-dlestick is formed when a security’s open and close are practically equal. The pat-tern indicates indecisiveness, and based on preceding price actions and future confirmation, may indicate a bullish or bearish trend reversal.

Technical analysis of the QSE index

Definitions of key terms used in technical analysis

Source: Qatar Exchange (QE)

Source: Bloomberg

Source: Qatar Exchange (QE)

Source: Qatar Exchange (QE)

QSE Index and Volume

Weekly Index Performance

Qatar Stock Exchange

Top Five Gainers

Most Active Shares by Value (QR Million)

Investor Trading Percentage to Total Value Traded

Top Five Decliners

Most Active Shares by Volume (Million)

Net Traded Value by Nationality (QR Million)

BUSINESS

Gulf Times Sunday, May 6, 201816

BUSINESS17Gulf Times

Sunday, May 6, 2018

LNG shipping outlook seen brighter after Q1 slumpBloombergLondon

Liquefi ed natural gas shipowner Gaslog Ltd predicts a buoyant year after a muted start as energy traders seek vessels early to

avoid last winter’s tanker shortage.Gaslog, which has 29 LNG carriers world-

wide, is already fi elding inquiries for multi-month charters as protection for next winter before heating demand – and prices – soar. The Bermuda-registered shipper reported fi rst-quarter revenue on Friday that missed analysts’ estimates.

LNG prices and shipping rates surged to a four-year high in December as the pace of Chi-na’s anti-pollution drive and unprecedented demand for cleaner natural gas took traders by surprise. At the same time, declining natural gas production in Europe boosted its need for LNG shipments to cope with an abnormally cold winter.

“A trader told me that there were opportu-nities last winter to take cargoes out of Europe into Asia with great arbitrage possibilities,” Paul Wogan, chief executive offi cer of GasLog, said in a telephone interview. “They couldn’t take ad-vantage of it because there were simply no ships available.”

Shipping rates have slumped from Decem-ber’s peak in a “pronounced” slide exacerbated by outages at LNG plants such as in Papua New Guinea, a key supplier of the super-chilled fuel for Asia. The production halts cut the number of cargoes that could be transported, Wogan said.

“We are starting to see the market turn again,” Wogan said. “Our customers and the people supplying the LNG see the same trends that we do, and are hoping to be able to lock into char-ters now to guarantee that they can supply the product.”

Shipping rates are still above levels seen in the same period last year, and there are signs prices have reached a bottom, according to GasLog’s earnings statement. As summer approaches, demand for cooling in the northern hemisphere and for heating south of the equator will drive the shipping market in coming months, Wogan said.

While customers are seeking to sort their winter shipping requirements now, GasLog may benefi t more from spot market rates at the height of the winter.

“From the shipowner’s point of view, we believe that this market will be strong in the winter,” he said. “We would rather take what we think is going to be a very strong spot rate through the coming summer and winter.”

Man who ran Venezuelan oil giant for decade predicts fast demise

BloombergNew York

Rafael Ramirez (pictured), the once all-powerful Venezuelan oil czar, says the state producer he ran for almost 10 years is on the brink of collapse.He blames it on a power grab by the government that’s after him.President Nicolas Maduro, an old rival of Ramirez within late Hugo Chavez’s inner circle, last year carried out a purge at Petroleos de Venezuela SA that saw many former allies of the oil man go to jail on corruption accusations. Ramirez himself came under investigation and now lives in exile.

“PDVSA may fall into an accelerated spiral downward” from the already low oil output of about 1.5mn bpd, he said during an 80-minute telephone interview from an undisclosed European city. He estimates 600,000 bpd of production could be lost each year because of a lack of investment.Ramirez, 54, became oil minister in 2002 during Chavez’s regime and two years later started his decade-long tenure as president of PDVSA, while remaining minister. He broke a long-standing separation between the ministry he headed and the company it oversees.Production at PDVSA has been shrinking since the late 1990s, when it reached almost 3.5mn bpd. During

Ramirez’s time as head of the company, output dropped about 10%. It has slumped more than 30% since he left, especially over the past two years as the country’s economy spiralled deeper into mayhem.PDVSA’s declining production reflects the “lack of knowledge and experience” of the current board of directors and the political infighting taking place at the oil conglomerate, Ramirez said.The “grave situation” facing PDVSA, he said, is worsened by a recent decree granting overarching power to Major General Manuel Quevedo, who took over as head of the company in November after former oil ministers Eulogio Del Pino and Nelson Martinez

were arrested. The decree has given Quevedo “exorbitant, unprecedented powers,” he said.As a result of the “collapse in production and refining,” Venezuela will increasingly surrender control of PDVSA to international companies operating in the South American nation, Ramirez said.“Under the argument that we destroyed the company, PDVSA will be de facto privatized,” he said. “It’s being taken out of the control of the Venezuelan state.”People like Luisa Ortega, a former Venezuelan chief prosecutor who split with Maduro last year, say his war on graft is a farce to strengthen his grip over the country, and Ramirez says he’s

the victim of political persecution.In December, Venezuela’s public prosecutor, Tarek William Saab, announced the opening of two investigations against Ramirez involving an alleged scheme to sell crude oil illegally and a “corruption plot.” He also faces an older accusation from the nation’s Congress that $11.3bn went missing from PDVSA between 2004 and 2014 when he led the producer.“I can demonstrate that I live from my work,” Ramirez said, rejecting the accusations. “Nothing related to ill-gotten wealth or that I have allowed acts of corruption. The accusations are politically motivated.”

Texas drillers find too few railcars for all their oil, sand

BloombergNew York

Oil producers may be getting in their own way in the race to pump

crude from the fertile Permian Basin.

Railcars full of sand have helped producers unlock record amounts

of crude in the Permian Basin, pushing regional prices well-below

the going rate on Gulf Coast. Pipelines needed to carry the oil to

the market are full and the railroads are backed up with sand ship-

ments.

The stakes are high. Spot crude at Midland, Texas, in the heart of

the Permian is trading about $15 a barrels below the grade of oil in

Houston. This discount more than covers cost to ship crude by rail

to the coast, so theoretically, oil traders stand to make about $7 a

barrel if they can arrange for rail transportation to Houston.

The Permian is the leading destination for fracking sand shipments

for two of the country’s major rail service providers, Union Pacific

Corp and Burlington Northern Santa Fe LLC, according to Joseph

Triepke, founder of Tennessee-based oilfield research firm Infill

Thinking. “The vast majority of the oilfield rail infrastructure is

designed for sand,” Triepke said in a phone interview.

Inquiries to move Permian oil by rail have picked up, though there

hasn’t been any actual surge in crude-by-rail activity, at least not

yet, Dan Lester, vice president for commercial operations at trans-

port service provider Watco Cos LLC, said. The company operates

three short line railroads in West Texas, two of which directly serve

the Permian Basin.

Oil and sand might not use the same type of railcars, but they still

compete for resources.

“Once they are in the Basin they are using the same track,” Infill

Thinking’s Triepke said.

There is also competition for locomotives, crew and power in a

region that is forecast to consume 48mn tonnes of fracking sand this

year, he said. That accounts for 45% of total US fracking sand needs.

Cheniere outruns rivals as profi ts climb on LNG demand

BloombergNew York

Cheniere Energy Inc saw profi ts surge in the fi rst quarter after it boosted

natural gas exports just as the world needed more of the fuel to fi ght off frigid weather in Asia and meet strong demand from China.

Two years after posting its fi rst profi t, America’s fi rst ex-porter of US shale gas overseas is cementing its advantage over slower-moving rivals. Cheniere’s revenues jumped 85% from a year earlier after opening a fourth liq-uefaction plant at the Sabine Pass export terminal in Louisiana, adding to its capacity to chill nat-ural gas into a liquid for shipment.

Cheniere reported loading 67 liquefi ed natural gas tankers in the quarter, bringing the total since 2016 to about 350 ship-ments to more than two dozen countries, and the company raised its guidance for the year. Investors responded by boosting shares as much as 3.7% to $61.16, the highest since 2015.

The price for liquefi ed natural gas in the quarter was “stronger and more durable than we previ-ously forecast,” chief executive offi cer Jack Fusco said in a state-ment on Friday. The higher pric-ing came as the new export ca-pacity at Sabine Pass allowed the company to trigger 20-year con-tracts and fi xed fee payments.

Adjusted earnings of $907mn during the fi rst three months of the year topped the consensus of $619.7mn. The Houston-based LNG exporter now sees adjusted earnings of $2.3bn to $2.5bn in 2018, compared with a previous forecast of $2bn to $2.2bn.

Hedge funds curbing bets on oil rally just as price nears $70BloombergNew York

Money managers curbed their en-thusiasm for oil just before the US benchmark price surged to

almost $70 a barrel.Total wagers on West Texas Interme-

diate crude slid to the lowest since early January, with bets that it will rise shrink-ing for a second week. That was days before Iran accused President Donald Trump of “bullying,” while the US sig-nalled it’s preparing to pull out of a nu-clear accord that’s allowed Opec’s third-largest producer to export more crude.

Hedge funds could be proven right in the longer run, though, if tensions sub-side and the market’s focus shifts back to abundant American supplies.

“They may have missed a little bit of a run,” said Nick Holmes, an analyst at Tortoise in Leawood, Kansas, which manages $16bn in energy-related assets. “But if they were long over the last four to six weeks, they’ve done quite well as some of the geopolitical risk and tensions have escalated.”

Crude futures in New York have rallied

more than 15% so far this year and money managers’ bullish stance on the bench-mark is still near double the levels seen in October.

Less than two weeks before a May 12 deadline for Trump to decide on sticking

to the nuclear deal or walking out, Israeli Prime Minister Benjamin Netanyahu said his country has half a tonne of Iranian documents that prove Tehran had a secret programme to build nuclear bombs. Yet, Iran’s foreign minister Javad Zarif said

there is only one way forward: US com-pliance with the agreement.

“This market is just solidly all bulled up,” said John Kilduff , a partner at Again Capital LLC, a New York-based hedge fund. That’s largely due to “geopolitical hedging.”

Amid the Iran risks, some banks are calling for higher oil prices. Bank of America Merrill Lynch expects the glo-bal Brent benchmark to exceed $80 this quarter. Some oil options traders are even betting that Brent will top $90 a barrel in the fourth quarter.

The US’s take on Iran sanctions is the key price-driver, according to Stand-ard Chartered. The market has priced in more than a 50% probability that the US’s waiver against Iran won’t be extend-ed, but there’s still “signifi cant upside” should the waiver lapse, the bank said.

Hedge funds reduced their WTI net-long position – the diff erence between bets on a price increase and wagers on a drop – by 3.5% to 418,047 futures and options during the week ended May 1, according to the US Commodity Futures Trading Commission. Longs fell 3.3% to the lowest in four months, while shorts dipped 1.2%.

Crude futures in New York have rallied more than 15% so far this year and money managers’ bullish stance on the benchmark is still near double the levels seen in October

Shipping rates have slumped from December’s peak in a “pronounced” slide exacerbated by outages at LNG plants such as in Papua New Guinea, a key supplier of the super-chilled fuel for Asia

BUSINESS

Gulf Times Sunday, May 6, 201818

VIX manipulation probes sow angst around Wall Street fear gaugeBloombergNew York

The world got a stomach-churning lesson in the risks of trading volatility after the VIX swung wildly in February.Now, traders are experiencing another gut check as market regulators look into allegations that the index is being rigged.News broke on Thursday that the US Securities and Exchange Commission and Commodity Futures Trading Commission opened probes into the VIX, one of Wall Street’s most widely used benchmarks. One area of investigation is the monthly auction that determines the price of futures contracts tied to the VIX, people familiar with the matter said.“If they find something that is untoward, that’s a big deal,” said Amy Wu Silverman, managing director and equity derivatives strategist at RBC Capital Markets LLC. “VIX has become an industry standard, it’s almost synonymous to volatility. Questions like ‘What exactly is going on?’ make people nervous.”The development is a blow to Cboe Global Markets Inc, which compiles the so-called fear gauge. Not only has the company been stung by the recent bouts of turbulence, but its crown jewel, the VIX, has become the focus of intense scrutiny after a 2017 research paper alleged its process is vulnerable to being manipulated.In a statement, Cboe expressed confidence in its market oversight. It has said that allegations of manipulation are unfounded.A sign anxiety is rising: Cboe off icials have been leaning on compliance departments at firms that trade VIX options and futures, asking what they’re doing to prevent misconduct among customers, according to a person whose company has been queried. The inquiries began about a week ago, said the person, who asked not to be named.While Cboe off icials have repeatedly dismissed the claims as baseless, traders seem less certain. Punished first in February by concern that month’s histrionics would dent its volatility franchise, Cboe’s stock is down 15% in 2018, after rising 27% annually since the end of 2010 and never posting a down year. It’s fallen in four of the past five weeks.While trading in VIX options set a record high during the

first quarter, as did related S&P 500 contracts, investors have liquidated positions in VIX futures, with open interest sinking to the lowest levels in about two years. Volume slowed in April to the lowest level in more than a year, according to data compiled by Bloomberg.Cboe owns the intellectual property underlying the VIX and charges money to use VIX-related products it created. If you buy an options or futures contract, you usually pay a transaction cost that the Cboe collects, while VIX-related exchange-traded notes and funds owe a licensing fee. Trading fees from VIX futures and options, added together, make up roughly 25% to 30% of the Cboe’s revenue, depending on the quarter, according to Christopher Allen, senior research analyst at Rosenblatt Securities.Over the years, allegations of VIX rigging have occasionally surfaced, though were seldom taken seriously by professionals. The latest claims have piqued more interest among traders who have been baff led as settlement values increasingly occurred far away from prevailing market prices.Research published by Bloomberg News in January showed that of the 10 biggest gaps between the VIX settlement value and its closing level the night before, five came in 2017, including December’s, which was the biggest discount in 11 years.Leaders of the exchange, among the most respected in the industry, are on the defensive, assuring traders in a letter last week that no manipulation has occurred while at the same time vowing to improve the process by which the auction is conducted. It was signed by Ed Tilly, the chief executive off icer, and Cboe President Chris Concannon, once an SEC lawyer.In response to news of the probe, the company said in a statement that it is “confident of our regulatory program, and that of our regulatory services provider, Finra.” The reference is to the Financial Industry Regulatory Authority, which Cboe hired to help police its markets.“Both our regulatory programme and Finra maintain surveillance programmes and dedicated teams of staff that surveil and monitor the trading activity and review every settlement across our futures and securities markets,” according to the statement.

From ‘dangerous’ Trump to Italy, five risks that keep EU awakeBloombergBrussels

The European economy is poised to see

another year of strong growth, but clouds are

gathering over what was once a sunny horizon.

Inflated asset prices, trade protectionism, a

looming monetary policy tightening, uncer-

tainty in Greece and Italy, and continuing weak-

ness in the UK mean that risks “have sharply

increased,” the European Commission said in its

quarterly economic report published last week.

Here’s a quick look at the main signs of

trouble ahead:

Gloomy UK outlook: The commission main-

tained its gloomy outlook for the U.K. economy,

projecting “weak” business investment,

“subdued” private consumption, and household

savings stabilising “around historic lows.” While

growth last year was higher than the commis-

sion staff had projected, this was mostly due to

the carryover eff ect of 2016, according to the

forecasters. The economy is now seen growing

1.5% this year, and slowing to 1.2% in 2019.

While the figures are slightly better than

the previous forecast published in February,

the UK is still tied with Italy as Europe’s growth

laggard. On the bright side, inflation will cool to

below the Bank of England’s target by next year

despite tight conditions in the labor market, “as

the impact of sterling’s earlier depreciation on

consumer prices unwinds.”

US overheating, trade: The commission re-

iterated that the biggest risks to global growth

stem from the US and the policies of Donald

Trump’s administration, which it said “present

a dangerous nexus.” The EU’s executive arm

reiterated its warnings that the fiscal stimulus

injected by Trump’s tax cuts may lead to an

overheating of the American economy and trig-

ger faster Federal Reserve tightening.

Due to its openness, the European economy

would be vulnerable to any further deteriora-

tion of trade conditions, the commission said.

“Overall, trade disputes could blow the current

expansion off course” was the commission’s

summary of the situation.

Greece again: Growth in the debt-ridden

state was cut to 1.9% for 2018 and 2.3% in 2019 -

from 2.5% projected for both years in February.

This isn’t great news for Athens, which has

been trying to convince markets it can stand

on its own feet as it seeks to exit its bailout in

three months. The commission said that weak

consumption suggests households are more

financially stretched than anticipated and

improvements in employment are taking longer

to be translated into higher consumption.

Italian woes: While the commission kept its

growth forecast unchanged for Italy, it cautioned

that risks to its outlook have become more

tilted to the downside. “Policy uncertainty has

become more pronounced and, if prolonged,

could make markets more volatile and aff ect

economic sentiment and risk premia,” it said.

The warning comes amid Rome’s impasse after

a general election two months ago produced a

hung parliament and amid a growing risk that

another vote will be needed. That would prolong

the economic and political uncertainty.

Spain’s budget: Good news on growth for

Spain, with the European Commission raising its

forecasts for 2018 and 2019 – to 2.9% and 2.4%

respectively. However, it also said the country

risks missing its deficit-reduction goal because

of extra budget spending such as tax cuts for

low earners and perks for civil servants and

pensioners.

Prime Minister Mariano Rajoy is trying to

square pressure to reduce the deficit from

Brussels authorities with his own political

needs. He’s promised further perks to appease

political rivals and get his very delayed budget

for 2018 approved, securing at least another

year in off ice with his minority government. On

the flip-side, that could translate into further

budget slippages.

AXA’s investment arm takesfi rms to task over diversityReutersLondon

AXA Investment Managers will vote in protest against companies which do not

explain how they will boost the number of women on their boards, joining growing demands for workplace diversity.

AXA IM, one of Europe’s biggest fund managers and part of French insurer AXA Group, said the move followed fi ve years of unsatisfacto-ry private engagement with fi rms considered to have too few, if any, female decision-makers.

“We are using our infl uence as in-vestors through our engagement ac-tivities, to address this (diversity) in all markets, developed and emerg-ing,” Shade Duff y, Head of Corporate Governance, told Reuters.

“We will vote against all-male boards where there is no commu-nication of plans to seek to appoint women to the board in the near fu-ture,” AXA IM’s Duff y added.

This refl ected its global com-mitment to improving diversity among the hundreds of companies it owns stakes in, as part of a big-ger plan to drive greater innovation and spur higher returns.

As of April 30, the number of ‘oppose’ votes AXA IM has logged in annual shareholder meetings this year has risen to 25 from 1 last

year, as a result of the new policy.The protest covers shareholder

resolutions, ranging from votes against the Annual Report and Accounts to the re-election of the chairman or the chairman of the nominations committee.

Duff y declined to name the fi rms AXA IM has opposed, pending communication with the relevant companies and directors.

“Our aspiration here (is) not just about leadership or the visible face of a company — it is about the

broader workforce and the pro-gression of women to roles where they can infl uence strategy and performance,” Duff y said.

“The board is just the tip of the iceberg,” she added.

News of AXA IM’s voting inten-tions comes as executives face in-vestors at annual general meetings, a forum for raising concerns about the way a company is run or is per-forming. It follows a similar move by Legal & General Investment Management, one of Britain’s big-

gest money managers, which last month said it would vote against chairs of boards which had fewer than 25% female membership.

A law introduced last year in Britain requires companies and charities with more than 250 workers — covering almost half of its workforce — to report their gender pay gap, which in Brit-ain stands at 18.4%. AXA IM has a tradition of pushing companies to consider reforms that promote better working conditions, greater care of the environment and im-prove public health.

In 2016, it became the fi rst major fund fi rm to announce it would ban all new investments in the tobacco industry, which led to a 1.8 billion-euros sell off of tobacco bonds and stocks. That followed a €500mn ($602mn) divestment from compa-nies with a high involvement in coal-related activities in 2015, in line with the wider group’s corporate respon-sibility strategy on climate change.

AXA IM also launched a fund in February 2017, led by Anne Tol-munen, which it hopes will dem-onstrate how companies with stronger gender diversity can de-liver higher returns.

Atlas Copco, Facebook, Micro-soft, Statoil and Bank of America are among the AXA WF MiX fund’s top 10 positions. At the end of March, it had delivered a 12.8% re-turn since its launch.

The headquarters of AXA in Paris. AXA Investment Managers will vote in protest against companies which do not explain how they will boost the number of women on their boards, joining growing demands for workplace diversity.

Nine days, one signal: US economy is doing well if not greatBloombergWashington

The data deluge that swept over the US economy since the middle of last week can be boiled down

in one message: Lofty expectations, but more down-to-earth numbers.

Overall, the job market is going strong without overheating, while the economic expansion – which this month became the second-longest on record – is on solid ground even with a soft start to the year that’s expected to give way to a tax-cut-driven rebound. The results amount to a wash for Federal Reserve policy mak-ers, who skipped a rate hike at their May 1-2 meeting as expected.

The central bank remains on track to raise interest rates in June for the second time this year, and once or twice more af-ter that in 2018.

Here are the highlights from recent numbers:

1. Job market is doing fi ne, wage gains remain tepid

While the 164,000 increase in April payrolls was less than forecast, revisions added a total of 30,000 to payrolls for the previous two months.

The unemployment rate fell to 3.9%, dropping below 4% for the fi rst time since 2000, and drifting further below Fed offi cials’ estimates of levels sustain-able in the long run.

The slack isn’t disappearing fast enough, though, to create the long-awaited acceleration in pay gains. The payrolls report showed wages rose a less-than-forecast 2.6% from April 2017, and the prior month’s increase was revised lower.

A more positive signal came from the fi rst-quarter employment cost index, seen as a more comprehensive measure, which showed private-sector wages and salaries posted the strongest year- over-year gain of this expansion.

2. Factories are hiring and struggling to fi ll robust orders

One standout in the jobs report was manufacturing payrolls, which in April had the strongest year-over-year gain since May 1998. The numbers tied in nicely with the Institute for Supply Management’s manufacturing survey released on Tuesday, which showed sol-id-but-moderating growth. That index missed economists’ forecasts, and the group said factories are struggling to fi nd the workers, supplies and delivery trucks needed to keep up with demand. The dynamic is creating price pressures and supply-chain disruptions, worsened by the US-China trade spat.

3. Hiring, growth in service industries is a bit cooler lately

Hiring at service providers was little changed in April at 119,000, according to the Labour Department fi gures on Fri-day. Some hint of that came in the ISM non-manufacturing survey released a day earlier, which also fell short of ana-lysts’ forecasts. Growth in service indus-tries, which account for about 90% of the economy, cooled in April to a four-month low and hiring eased as business-es cited a shortage of qualifi ed labour.

4. The trade gap narrowed but tensions with China remain

Trade tensions between the world’s two-largest economies also are weighing on an otherwise solid outlook for activ-ity and employment. While Commerce Department data released on Thursday showed the export-import gap shrank in March, the US merchandise trade gap with China widened by 16% to $91.1bn in the fi rst three months of the year. Two days of US- China trade discussions ended in Beijing Friday on a note of dis-

cord, with both sides agreeing to keep on talking.

5. Productivity still isn’t going anywhere fast

The weakness in worker pay may be partly a reflection of lacklustre pro-ductivity.

The latest confirmation came Thurs-day, with the Labour Department re-porting that in the first quarter, non-farm business employee output per hour climbed 1.3% from a year ear-lier, in line with the 1.2% average from 2007-2017. Unit labour costs rose 1.1% from a year ago. Recent technological advances have failed to spur a big surge in productivity that’d allow businesses to increase profits while also giving out bigger paychecks.

6. GDP, consumer spending slow but set to pick up

At the same time, lower taxes may improve households’ ability to sustain their spending – the biggest part of the

economy – and help bring about a re-bound in growth after the first-quarter slowdown. Commerce Department fig-ures on April 27 showed gross domestic product grew at a 2.3% annualised rate after three quarters of gains above or near 3%.

Still, fi gures released on Monday showed consumer spending picked up in March, providing a solid handoff into this quarter.

Alongside, the Fed’s preferred gauge of infl ation hit the central bank’s 2% target in March, the fi rst time in a year and a reinforcement of the outlook for further, gradual interest-rate hikes.

Meanwhile, the University of Michi-gan survey on April 27 showed consumer sentiment remained elevated in April amid increasingly favorable views of per-sonal fi nances, though the index fell from March. In addition to the healthy jobs numbers, it’s another sign of how this quarter is shaping up.

Company representatives talk with job-seekers during a job fair in Chicago, Illinois (file). The US job market is going strong without overheating, while the economic expansion, which this month became the second-longest on record, is on solid ground even with a soft start to the year that’s expected to give way to a tax-cut-driven rebound.

BUSINESS19Gulf Times

Sunday, May 6, 2018

Insurers hit shift button despite Brexit grace periodReutersLondon

Lloyd’s of London, AIG, Allianz and other insurers are ignoring assurances and establishing new

hubs in Britain and the European Un-ion before Brexit in March 2019 to en-sure access to customers.

The moves come despite a “stand-still” transition agreement struck be-tween Britain and the European Union in March of this year which is meant to avoid any such hasty relocations.

“We have urged fi rms not to wait for and rely on a political process to deliver the answers.

This is particularly true of relocation plans, which take two years or more to complete,” Hugh Savill, of the Associa-tion of British Insurers, said.

Insurers are being driven by the fact that after Brexit, European fi rms sell-ing policies in Britain, as well as British and other non-European Union insur-ers with UK bases selling into Europe,

will need to have local regulated enti-ties. Many contacted by Reuters have said they are starting to implement the second phase of their Brexit plans — submitting licence applications, hiring staff and shifting policies.

“We are prepared for a hard Brexit,” said Joachim Wenning, chief executive of Germany’s Munich Re, the world’s biggest reinsurer, which has applied for UK licences.

Such planning has been encouraged by EU regulators who say transition will not be ratifi ed until October and could be derailed without agreement on other parts of Britain’s divorce.

“I don’t think there is any going back,” Paul Merrey, a partner specialis-ing in insurance at consultants KPMG, said. American insurer AIG said it will open new subsidiaries in Britain and Luxembourg by December, and has be-gun moving policies from one jurisdic-tion to another.

Meanwhile, Japanese insurer Som-po’s international unit last week re-ceived approval for its Luxembourg

subsidiary, which it said would start operating before the end of the year.

Even Lloyd’s of London, the world’s

largest commercial insurance market which is synonymous with the capi-tal’s fi nancial centre, will have its new

Brussels subsidiary ready by January for the policy renewal season kick-off .

“Companies must take their futures into their own hands, and Lloyd’s is no diff erent,” its Chief Executive Inga Beale said, while Lloyd’s market op-erator CNA Hardy’s CEO Dave Brosnan said it is obtaining a licence for a Lux-embourg subsidiary.

The Bank of England says that tran-sition, which is meant to give fi nancial fi rms breathing space until the end of 2020, can be relied on immediately so that EU insurers do not have to seek reauthorisation for UK operations by next March.

It has also eased the rules for decid-ing if operations of insurers from out-side Britain can continue as branches or must convert into subsidiaries with their own capital, an expensive process which only a small number face.

The BoE says UK and EU legislation is needed to ensure 10mn British poli-cyholders with £27bn in liabilities and 38mn European Economic Area poli-cyholders with £55bn of liabilities are

not hit. Swiss insurer Zurich is talking to UK regulators about the licence for its general insurance business, which has its EU headquarters in Dublin.

Its UK CEO Tulsi Naidu said she welcomed the Bank of England and UK government’s stance, in “providing early certainty for in-bound branches”.

Germany’s Allianz also told Reuters it was applying for a branch licence for one of its units in Britain and after re-quests from brokers, Munich Re said it applied in March for UK licences as well, at a cost of “low double-digit million fi gure”.

Insurers are also moving policies from London to new EU hubs, to en-sure that customers can still pay pre-miums and receive payouts on cross-border contracts after Brexit Day.

One-year policies taken out after March 29 this year are at risk.

Insurers may be implementing Brex-it plans, but staff moves are so far mod-est, far fewer than the several thousand banking jobs expected to shift, accord-ing to a Reuters survey.

Berkshire swings to rare loss but performs betterReutersNew York

Warren Buff ett lost money

but had a pretty good quarter.

Berkshire Hathaway yesterday

reported an unusual quarterly

net loss, the result of an ac-

counting change that Buff ett

had warned would produce

“wild” but in his view meaning-

less swings in results.

But Berkshire also ended a

long stretch of disappointing

operating performance, as

insurance rebounded from a

diff icult quarter while economic

growth bolstered results in rail-

road, industrial and consumer

businesses.

Berkshire posted a first-quar-

ter net loss of $1.14bn, or $692

per share, compared with net

income of $4.06bn, or $2,469

per share, a year earlier.

The accounting change

required Berkshire to report

$6.2bn of unrealised losses in

its marketable stock portfolio,

which totalled $170.5bn at year

end, regardless of whether it

planned to sell those stocks.

Buff ett has called the new

rule a “nightmare” that would

produce “truly wild and capri-

cious swings” in bottom-line

results that could, depending

on their direction, unnecessarily

scare or embolden investors.

Two of Berkshire’s biggest

stock investments, Wells Fargo

& Co and Coca-Cola Co, had

tough first quarters, falling

13.6% and 5.3%, respectively.

Berkshire said its operating

profit, which Buff ett considers

a better performance measure,

rose 49% to $5.29bn, or about

$3,215 per Class A share, from

$3.56bn, or $2,163 per share, a

year earlier.

Analysts, on average,

expected operating profit of

about $3,116 per Class A share,

according to Thomson Reuters

I/B/E/S.

Operating profit had previ-

ously fallen for five straight

quarters, and missed Wall Street

forecasts for eight straight.

Book value, which measures

assets minus liabilities, also

took a hit from falling stock

prices, falling 0.3% to $211,184

per Class A share, even though

Buffett boosted his stake in

Apple Inc by $12.5bn in the

quarter.

Some analysts have said the

stock losses have weighed on

Berkshire shares, which are 10%

below their record highs set on

January 29.

In Friday trading, the Class A

shares closed at$292,600, and

the Class B shares at $195.64.

Despite the Apple purchase,

Berkshire ended the quarter

with $108.6bn of cash and

equivalents, giving Buff ett am-

munition to make one or more

“huge” non-insurance acquisi-

tions he has said he wants.

Berkshire’s insurance

businesses, which had been

struggled with losses from

hurricanes and other events,

posted a $407mn underwriting

profit, compared with a year

earlier $267mn loss.

Geico was a star performer.

Pre-tax underwriting gains

nearly quadrupled, as it sold

more policies despite having

raised rates, while the rate of

policyholder losses fell.

New crisis would hammer Greek banks, says ECBAFP, ReutersFrankfurt/Athens

A fresh economic crisis would leave Greek banks exposed and see their capital slide by billions,

the European Central Bank said yester-day after publishing the results of a lat-est stress test.

The test on four major Greek banks four months before a planned exit from an €86bn bailout programme, showed their capital reserves would drop some 9% on average — around €15.5bn ($18.5bn).

The health check on Alpha Bank, Eurobank, the Greek National Bank and Piraeus Bank simulated how they would be aff ected by issues such as non-repayment of loans or a slump in turnover.

The putative drop is the equivalent of around half of the banks’ respective cash reserves.

The ECB said, however, that the test did not have a pass or fail thresh-old regarding a need to recapitalise but was merely a “general” evaluation, a spokesperson said.

The tests relate to the strength of the banks’ Tier 1 core equity ratio com-pared with total risk-weighted assets.

The four are among 120 banks which the ECB has been monitoring since 2014 and the latest test comes three months ahead of an August 20 deadline by Ath-ens’ creditors on whether Greece can exit the current bailout programme.

German media reports have suggest-ed the programme will be extended.

Piraeus Bank head Christos Megalou said, however, that “the economic cli-mate in Greece is notably improved.”

Greece has received three interna-tional credit lines since 2010, amount-ing to €300bn of aid along with help to restructure sovereign debt.

The country has endured a strict austerity programme in order to meet bailout criteria. Greece’s four biggest banks said that no new funding plans were needed after stress test results showed they would lose around €15.5bn of their capital by 2020 under an ad-

verse economic scenario. Test results for 33 lenders from other eurozone countries will be published in early No-vember.

Among the banks, Alpha Bank per-formed best as its Common Equity Tier 1 ratio (CET1) would drop by 8.56 per-centage points to 9.69% according the adverse scenario of the test.

It would drop by 8.68 percentage points to 6.75% for Eurobank, 9.56 per-centage points to 6.92% for National Bank of Greece and 8.95 percentage points to 5.90% for Piraeus Bank.

According to the ECB, the 2018 health check was not a pass or fail exercise as no predetermined capital threshold was set that would trigger a need to recapitalise.

“Any recapitalisation decision will be tak-en on a case-by-case basis, after assessing each bank’s situation in the light of the results of the stress test and any other rel-evant supervisory information, following a holistic approach,” the ECB said.

After the release of the stress test re-sults, Alpha Bank, National Bank and Eurobank said in separate statements that the input from SSM (Single Super-visory Mechanism) supervisors was that they had no capital shortfall and hence no capital plan was deemed necessary.

Piraeus Bank said it remains fo-cused on executing an existing capi-tal-strengthening plan to ensure that it would stay above applicable capital requirements at all times, while ac-

celerating the de-risking of its balance sheet. Greek banks have been recapi-talised three times since a debt crisis exploded in 2010, but are still burdened by €96bn of soured debt.

They have committed to targets to reduce that load to €65bn by 2019.

May’s exercise was their fourth stress test during the eight-year debt crisis.

Their fi rst recapitalisation took place in 2013 when a bank rescue fund, fund-ed by its eurozone lenders and the IMF, pumped €25bn into the four banks, while another €3.5bn was raised from private investors.

After another health check in 2014, banks raised €8.3bn from private in-vestors on prospects of a recovery. But

this proved futile a year later as a new leftist government in Athens clashed with offi cial lenders, sparking a mas-sive fl ight of deposits which led to capi-tal controls.

Banks were forced to undergo an-other stress test and recapitalise again in 2015 at beaten down share prices, severely diluting existing shareholders.

A total of €12bn was pumped into them via rights issues and CoCo bonds. Banks have been under regulatory pres-sure to tackle the bad debt problem, which restricts their ability to expand credit and help the economy recover. The so-called non-performing expo-sures (NPEs) are the biggest challenge facing the sector.

A logo is displayed on a sign outside the headquarters of AIG Europe in London. AIG, Lloyd’s of London, Allianz and other insurers are ignoring assurances and establishing new hubs in Britain and the European Union before Brexit in March 2019 to ensure access to customers.

Fed’s Bostic sees two more US rate hikes this yearReutersNew York

The Federal Reserve should raise interest

rates twice more this year, though upside

potential from tax cuts and new govern-

ment spending and a “rosy” economic

outlook could require a bit more tighten-

ing, Atlanta Fed President Raphael Bostic

said on Friday.

“I’m pretty firmly a three,” Bostic told Reu-

ters in an interview on the sidelines of the

Hoover Institution’s annual monetary policy

conference, referring to the total number of

rate hikes he expects the Fed to deliver this

year.”I’m open to going either direction, go-

ing back to two (rate hikes) or going to four,

depending on what the data show.”

The Fed, at the end of a policy-setting

meeting earlier this week, signalled rising

confidence in achieving the Fed’s 2% infla-

tion target as labour markets continue to

tighten.

Though policymakers left interest rates

unchanged in a range between 1.50% and

1.75% at this week’s meeting, they are widely

expected to pursue further gradual rate

increases this year as they lift them to a

more “neutral level,” estimated by most Fed

policymakers at about 2.75% and by Bostic

at about 2.5%.

Going into this year, Bostic had expected

the economy could probably weather only

two rate hikes.

But he has since become more confident,

he said on Friday.

“You look at the way the economy is

functioning and it is pretty rosy,” he said.

“There’s still a lot of stimulus from the

tax overhaul, the fiscal package is still

feeing its way through the economy and

so there’s a lot of upside potential that’s

out there.”

That was part of the reason he expects

inflation to stay in the range of 2% over the

mid-term.

At the same time, he said, it was im-

portant for the Fed to signal it has “some

degrees of freedom that we are going to

allow the economy to have: just because

inflation goes a little above the 2% target

doesn’t mean that we are going to panic or

act in a dramatic way.”

Still, he said, “This is not a declare a

victory type of moment; it’s really, we are

aware, we are alert and we are willing to be

flexible as the data takes us places.”

EU said to mull settling row over US metal levies with quotasBloombergBrussels

The European Union is leaving open the option of a settlement with President Donald Trump

over his controversial metal tariff s on the basis of US import quotas, accord-ing to offi cials from the bloc.

An EU condition for such a deal would be that any US limits on steel and aluminium from the 28-nation bloc be set at levels no lower than its 2017 shipments to the Ameri-can market, the offi cials in Brussels said on condition of anonymity. EU exports to the US last year of both types of metal were worth a com-bined €6.4bn ($7.6bn).

Without taking any decisions, EU national representatives meeting in the Belgian capital on Friday didn’t rule out the possibility of a quota-based accord in the run-up to the June 1 expiry of the bloc’s exemption

from the US duties, according to two of the offi cials, who asked not to be named because the talks were confi -dential. Trump, who introduced the levies in March on national-security grounds, excluded the EU initially until May 1 and this week prolonged the waiver for a “fi nal” 30 days.

The EU’s potential willingness to tolerate quotas on its steel and alu-minium exports to the US highlights the political pressures within the bloc to put short-term economic interests above policy principles. Quantitative restrictions on commerce are gener-ally disallowed under World Trade Organisation rules, which, however, can be enforced only after a com-plaint by a member country.

To date, the EU has loudly reject-ed the US tariff s of 25% on steel and 10% on aluminium as illegal under global rules, and demanded a “per-manent, unconditional” exemption. The bloc has threatened, without one, both to complain to the WTO

and to impose tit-for-tat duties on €2.8bn of imports of US goods in-cluding Harley-Davidson motorcy-cles and Levi Strauss & Co jeans.

At their meetings this week in Brus-sels, the EU national representatives stressed their preference for a full, unconditional waiver from the levies, according to the offi cials. Some mem-ber-country experts also expressed reservations about going down the path of quotas, which the White House has said it’s focused on in order to “restrain imports, prevent trans-shipment and protect the national security.”

French junior foreign aff airs min-ister Jean-Baptiste Lemoyne said in an interview with Les Echos that France wants a full, permanent and unconditional exemption from tar-iff s and rejects a negotiation with the US Enrico Brivio, a spokes-man for the European Commission, which runs the bloc’s trade policy, didn’t immediately reply to a re-quest for comment.

The headquarters of European Central Bank in Frankfurt. A fresh economic crisis would leave Greek banks exposed and see their capital slide by billions, the ECB said yesterday after publishing the results of a latest stress test.

Sunday, May 6, 2018

BUSINESSGULF TIMES

EM capital fl ows prove more volatile in ’18 due to rising US rates: QNBEmerging market (EM) capital flows have proven to be more volatile this year in the face of rising US interest rates, QNB has said in an economic commentary. Portfolio capital flows to emerging markets (EMs) were strong during 2017 supported by a backdrop of solid global growth and buoyant risk appetite. However, since February this year capital flows to EMs have been more volatile in the face of rising US interest rates, QNB said. The first signs of pressure in 2018 began to emerge in February when the Institute of International Finance (IIF) data shows there was a monthly portfolio capital outflow from emerging markets for the first time since November 2016. An important driver of that capital flow reversal was the continued rise in US interest rates, particularly 10-year treasury bond yields, which increases the relative attractiveness of holding US government bonds versus emerging market

assets, a development we discussed in an earlier note (Rising inflation expectations spook markets). After a period of heightened risk aversion in February, capital flows to EMs stabilised somewhat in March according to preliminary IIF data, QNB noted.However, more recent daily data available from the IIF point to capital flows reversing again in mid-April as US 10-year treasury yields breached 3% for the first time in over four years. Total portfolio capital outflows (since April 16) are estimated to be $5.6bn, split equally between EM equities and bonds. In part the rise in US 10-year bond yield is being driven by the US Federal Reserve which continues to raise its Federal Funds Target Rate and reduce the size of its balance sheet, and in part by future increases in the US government’s fiscal deficit following the recently announced tax cuts, and the increasing issuance of

government bonds that this implies. According to IIF estimates, a 100 basis point increase in short term interest rates in the US would result in a $43bn reduction in capital flows to EMs in 2018. So far, the US Fed has delivered one rate hike of 25bps this year, and it’s own median projection is for a total of three 25bps rate hikes in 2018. In a rising interest rate environment investors are likely to pay closer attention to EM economic fundamentals, and in particular to high and rising debt levels as the cost of refinancing debt climbs, QNB said.In total, more than $900bn of EM bonds mature before the end of 2018. Those EM economies that have wider current account deficits and higher debt repayments this year are likely to be seen as riskier investments and could potentially attract less foreign capital inflows for the remainder of the year. On the basis of this metric, some emerging

markets are likely to be more exposed to sudden shifts in investor sentiment. “While rising US interest rates are clearly a headwind for capital flows to EM economies, this is to some degree balanced by the positive backdrop for global growth which remains supportive of risk sentiment. Instead of an across-the-board flight from emerging markets for the remainder of 2018, investors are likely to be more discriminating across countries on the basis of economic fundamentals as the cost of refinancing or repaying debt rises in the face of rising global interest rates. “Those economies with solid economic fundamentals including high or accelerating growth and lower levels of leverage (both government and private sector) are likely to be relative outperformers in terms of their ability to attract foreign capital inflows. It will no longer be a case of a rising tide lifting all boats,” QNB said.

Singapore Business Council in Qatar launchedThe Singapore Business Council in Qatar (SBCQ) was launched at the Singapore Embassy in Qatar under the patronage of Singapore ambassador Jai S Sohan. The SBCQ aims to foster closer relationship between business communities in Singapore and Qatar as well as promote and

develop mutual investments and bilateral trade opportunities of both countries. The SBCQ will also provide guidelines and support to interested business parties seeking to explore opportunities in Qatar and Singapore. The SBCQ is organised under the patronage of the Singapore

Embassy in Qatar and registered in the Qatar Financial Centre as a non-profit business council. All off ice bearers are Singaporean volunteers currently working in Qatar’s business sector.The post of president is held by Joseph Abraham, Group CEO, Commercial Bank Qatar and

vice-president by Susanna Toi, chief business off icer, Taleb Group. The launch of the SBCQ follows the visit of the Singapore Foreign Minister Vivien Balakrishnan to Qatar last week and reflects the importance of Qatar to the Singapore government and business community.

QNB receives ‘Mortgage product of the year’ award from The Asian Banker

QNB Group has received “The Mortgage product of the year – QNB fi rst

cross border service” award from The Asian Banker magazine at a ceremony held recently.

The award was given to QNB, which is the largest fi nancial institution in the Middle East and Africa, as part of its par-ticipation in the “Excellence in retail fi nancial services awards” programme, which is one of the “most rigorous and prestigious awards” for consumer fi nancial services in the world, covering all of the Asia Pacifi c, the Middle East, and West Africa regions.

On the occasion, assistant gen-eral manager, Group QNB First, Fahad Abdulaziz al-Muhannadi said, ‘’QNB’s winning of the awards is a true testament to the excellence of the Group’s services and business model across its in-ternational network, given that The Asian Banker’s programme recognises fi nancial institutions for their vision, execution, and market leading proposition that make a real impact to their busi-ness and the local consumers in an ever changing industry.

“It is also a motivation to con-tinue to excel in providing the

best and most innovative prod-ucts and services for our well deserving customers’’.

One of QNB’s “truly inter-national and premium banking services” is QNB First and its Global Recognition programme, which is built on a deep under-standing and commitment to the enduring value of a relationship based on trust. The programme, QNB said, off ers “services that go beyond expectations” includ-ing mortgage solutions across diff erent countries.

The bank’s rigorously trained customer relationship manag-ers build personal relationships with QNB First members, tap-ping the bank’s vast network of specialists and carefully selected partners to craft solutions indi-vidually tailored to their needs.

QNB Group’s presence through its subsidiaries and as-sociate companies extends to as many as 31 countries across three continents providing a comprehensive range of ad-vanced products and services.

The total number of employ-ees exceeds 28,000 operating through more than 1,200 loca-tions, with an ATM network of more than 4,300 machines.

QIB holds bank-wide training on forgery crimes in banking sector

Qatar Islamic Bank (QIB) has recently organ-ised a series of intensive training courses for its staff on detecting and combating

forgery of banking documents and banknotes. The training, attended by all QIB tellers, is in

line with the key role the bank plays in the local banking sector. Its main objective is to strength-en the fi nancial protection of the bank’s and all banking customers in Qatar.

The latest experiences, tools, and technologies were used to provide high-quality training and ensure that the participants will follow the best practices in fi nancial fraud detection.

Trainees developed their skills on how to rec-ognise authentic banknotes, documents, sig-natures, and stamps and detect forgeries of all types. They were trained on the use of modern detection equipment in the banking sector and the measures that must be taken, based on QIB’s internal instructions, rules, and procedures of the Qatar Central Bank, when forgery is suspected.

Khalefa al-Mesalam, head of QIB Human Cap-ital Group, said: “QIB’s training and development programmes are aligned with the bank’s strategy and refl ect the bank’s vision and mission of creat-ing a unique work environment in terms of per-sonnel and technical capabilities. “These training courses aim to enhance the effi ciency of our staff in combating counterfeiting and forgery crimes, while enhancing the security of banking services to protect customers and shareholders.”While

highlighting the importance of training employ-ees to the highest standards of information secu-rity, to provide a safe and sound banking environ-ment for servicing its clients, al-Mesalam said: “QIB is implementing a 15-module information security training programme covering subjects that include safe web browsing, social engineer-ing, password protection, mail protection, and safe use of mobile phones. This programme is obligatory for all QIB employees, including those working at branches outside Qatar.”

QNB Group has received “The Mortgage product of the year – QNB first cross border service” award from The Asian Banker magazine at a ceremony held recently.

Singapore ambassador Jai S Sohan. Singapore Business Council in Qatar off ice-bearers.

QIB’s training and development programmes are aligned with the bank’s strategy and refl ect the bank’s vision and mission of creating a unique work environment in terms of personnel and technical capabilities

Exports growth pushes Qatar-Italy trade volume to €2.3bn in 2017: ITABy Peter AlagosBusiness Reporter

Italy’s overall exports to Qa-tar in 2017 saw a 3% increase over 2016 to push total trade

volume between the two coun-tries to €2.3bn last year, accord-ing to an Italian Trade Agency (ITA) offi cial.

Despite the economic block-ade imposed on Qatar in June 2017, trade commissioner Gi-osafat Rigano said the coun-try is witnessing “continuous growth” as refl ected by last year’s 9% increase in Qatar-Italy trade volume compared to 2016.

“There is a €28mn surplus in favour of Qatar but we can consider that the trade balance has stabilised; the most impor-tant things is that it is grow-ing. Overall exports to Qatar increased by 3% in 2017, and if we consider the crisis and the forthcoming months, it was a huge and very positive result,” Rigano emphasised.

According to Rigano, Italy is Qatar’s second main supplier of marble, which increased by 30% in 2017, and the top ex-porter to Qatar for ceramic tile coating, which grew by 38% for the same period.

“Italy has a confi dent fore-cast in Qatar’s construction sector and this is demonstrated by the large number of compa-nies that are replying to our in-vitation to the latest edition of Project Qatar.

“There are new opportuni-ties in several sectors not only in building and construction but also in the fi elds of landscaping and green development, which are the latest trends because they respond to the require-

ments of Qatar National Vision 2030,” Rigano told Gulf Times.

Deputy head of Mission Car-lotta Colli of the Italian embassy said the presence of Italian busi-nesses in Qatar “has signifi cant-ly broadened and gained new momentum,” adding that the growth in bilateral trade and new partnerships have developed in view of 2022 FIFA World Cup.

Speaking in a business meet-

ing held recently, Colli under-scored that many ministerial visits took place in Doha in the last eight months.

“We received six ministers and our prime minister in the previous period. This proves how much the Italian govern-ment is committed to improve relations with Qatar, and to im-prove relations between Italian and Qatari companies.

“We had signed many impor-tant agreements in the fi elds of defence and construction sec-tor, among others. All these happened amidst a regional situation, which are faced with challenges and constraints. But we also know that the Qatar government has put in place very timely measures and re-sponse to reduce and prevent potential economic and social

spillover, and we also very much appreciate that has been done in respect to the bilateral relations with Italy,” Colli stressed.

She added that to increase trade volume between both countries, plans are in the pipe-line to attract more Qatari in-vestments to Italy, which are in varied sectors like real estate and the hospitality industry, among others.

Colli and Rigano: Optimistic about new opportunities in several sectors in Qatar.